diff --git a/gcc/cp/ChangeLog b/gcc/cp/ChangeLog
index 24006fefdaa..8004e191493 100644
--- a/gcc/cp/ChangeLog
+++ b/gcc/cp/ChangeLog
@@ -1,3 +1,9 @@
+2007-07-30  Paolo Carlini  <pcarlini@suse.de>
+
+	PR c++/32108
+	* semantics.c (finish_label_stmt): Reject the __label__
+	extension outside function scopes.
+
 2007-07-29  Kaveh R. Ghazi  <ghazi@caip.rutgers.edu>
 
 	* parser.c (eof_token): Un-constify.
diff --git a/gcc/cp/semantics.c b/gcc/cp/semantics.c
index b03ec2f59ae..d80cd2b1128 100644
--- a/gcc/cp/semantics.c
+++ b/gcc/cp/semantics.c
@@ -1343,8 +1343,13 @@ finish_label_stmt (tree name)
 void
 finish_label_decl (tree name)
 {
-  tree decl = declare_local_label (name);
-  add_decl_expr (decl);
+  if (!at_function_scope_p ())
+    {
+      error ("__label__ declarations are only allowed in function scopes");
+      return;
+    }
+
+  add_decl_expr (declare_local_label (name));
 }
 
 /* When DECL goes out of scope, make sure that CLEANUP is executed.  */
diff --git a/gcc/testsuite/ChangeLog b/gcc/testsuite/ChangeLog
index 7d4be5e8b30..f60df69a862 100644
--- a/gcc/testsuite/ChangeLog
+++ b/gcc/testsuite/ChangeLog
@@ -1,3 +1,8 @@
+2007-07-30  Paolo Carlini  <pcarlini@suse.de>
+
+	PR c++/32108
+	* g++.dg/ext/label6.C: New.
+
 2007-07-29  Thomas Koenig  <tkoenig@gcc.gnu.org>
 
 	PR libfortran/32858
diff --git a/gcc/testsuite/g++.dg/ext/label6.C b/gcc/testsuite/g++.dg/ext/label6.C
new file mode 100644
index 00000000000..d026777eb9f
--- /dev/null
+++ b/gcc/testsuite/g++.dg/ext/label6.C
@@ -0,0 +1,3 @@
+// PR c++/32108
+
+__label__ L; // { dg-error "function scopes" }