diff --git a/gcc/cp/ChangeLog b/gcc/cp/ChangeLog
index 515f6feb9b3c1f5debca0ec555408f8b52eca0ea..d183371978e287507ceae9b6ba1f06197b98f6f0 100644
--- a/gcc/cp/ChangeLog
+++ b/gcc/cp/ChangeLog
@@ -1,3 +1,9 @@
+2004-04-05  Nathan Sidwell  <nathan@codesourcery.com>
+
+	PR c++/3518
+	* pt.c (check_cv_quals_for_unify): Ignore bogus CV quals at outer
+	level.
+
 2004-04-05  Richard Kenner  <kenner@vlsi1.ultra.nyu.edu>
 
 	* init.c (decl_constant_value): Don't look at DECL_INITIAL
diff --git a/gcc/cp/pt.c b/gcc/cp/pt.c
index fd38b0a381c0fb6ae6bf12afd89b71bf098f7b29..ca9a3ca27ab5635d49c2d90a6d3c96141a1a8f6a 100644
--- a/gcc/cp/pt.c
+++ b/gcc/cp/pt.c
@@ -9551,13 +9551,15 @@ check_cv_quals_for_unify (int strict, tree arg, tree parm)
   int arg_quals = cp_type_quals (arg);
   int parm_quals = cp_type_quals (parm);
 
-  if (TREE_CODE (parm) == TEMPLATE_TYPE_PARM)
+  if (TREE_CODE (parm) == TEMPLATE_TYPE_PARM
+      && !(strict & UNIFY_ALLOW_OUTER_MORE_CV_QUAL))
     {
       /*  Although a CVR qualifier is ignored when being applied to a
           substituted template parameter ([8.3.2]/1 for example), that
           does not apply during deduction [14.8.2.4]/1, (even though
           that is not explicitly mentioned, [14.8.2.4]/9 indicates
-          this). */
+          this).  Except when we're allowing additional CV qualifiers
+          at the outer level [14.8.2.1]/3,1st bullet.  */
       if ((TREE_CODE (arg) == REFERENCE_TYPE
 	   || TREE_CODE (arg) == FUNCTION_TYPE
 	   || TREE_CODE (arg) == METHOD_TYPE)
diff --git a/gcc/testsuite/ChangeLog b/gcc/testsuite/ChangeLog
index 36dcdf263df04900ced267e8777d74476c97042b..2d088b68b5e806a53fe85b3f7aac87925103c5af 100644
--- a/gcc/testsuite/ChangeLog
+++ b/gcc/testsuite/ChangeLog
@@ -1,3 +1,8 @@
+2004-04-05  Nathan Sidwell  <nathan@codesourcery.com>
+
+	PR c++/3518
+	* g++.dg/template/unify7.C: New.
+
 2004-04-02  Nathanael Nerode  <neroden@gcc.gnu.org>
 
 	* g++.dg/README: Bring up to date with new subdirectories; remove
diff --git a/gcc/testsuite/g++.dg/template/unify7.C b/gcc/testsuite/g++.dg/template/unify7.C
new file mode 100644
index 0000000000000000000000000000000000000000..3f7028b642ffca10c9af95cf29942325110cda30
--- /dev/null
+++ b/gcc/testsuite/g++.dg/template/unify7.C
@@ -0,0 +1,14 @@
+// Copyright (C) 2004 Free Software Foundation, Inc.
+// Contributed by Nathan Sidwell 1 Apr 2004 <nathan@codesourcery.com>
+
+// PR c++/3518
+template <typename T> void Foo (const T &);
+template <typename T> void Baz (const T (*)());
+
+int &f ();
+
+int main()
+{
+  Foo (f);
+  Baz (f); // { dg-error "no matching function" "" }
+}