Index: Python/compile.c
===================================================================
--- Python/compile.c	(revision 51362)
+++ Python/compile.c	(working copy)
@@ -2288,6 +2288,8 @@
 compiler_continue(struct compiler *c)
 {
 	static const char LOOP_ERROR_MSG[] = "'continue' not properly in loop";
+	static const char IN_FINALLY_ERROR_MSG[] = 
+			"'continue' not supported inside 'finally' clause";
 	int i;
 
 	if (!c->u->u_nfblocks)
@@ -2299,15 +2301,19 @@
 		break;
 	case EXCEPT:
 	case FINALLY_TRY:
-		while (--i >= 0 && c->u->u_fblock[i].fb_type != LOOP)
-			;
+		while (--i >= 0 && c->u->u_fblock[i].fb_type != LOOP) {
+			/* Prevent try: ... finally:
+			      try: continue ...  or
+			      try: ... except: continue */
+			if (c->u->u_fblock[i].fb_type == FINALLY_END)
+				return compiler_error(c, IN_FINALLY_ERROR_MSG);
+		}
 		if (i == -1)
 			return compiler_error(c, LOOP_ERROR_MSG);
 		ADDOP_JABS(c, CONTINUE_LOOP, c->u->u_fblock[i].fb_block);
 		break;
 	case FINALLY_END:
-		return compiler_error(c,
-			"'continue' not supported inside 'finally' clause");
+		return compiler_error(c, IN_FINALLY_ERROR_MSG);
 	}
 
 	return 1;
Index: Lib/test/test_syntax.py
===================================================================
--- Lib/test/test_syntax.py	(revision 51362)
+++ Lib/test/test_syntax.py	(working copy)
@@ -235,6 +235,90 @@
 >>> f() += 1
 Traceback (most recent call last):
 SyntaxError: illegal expression for augmented assignment (<doctest test.test_syntax[33]>, line 1)
+
+
+Test continue in finally in weird combinations.
+
+continue in for loop under finally shouuld be ok.
+
+    >>> def test():
+    ...     try:
+    ...         pass
+    ...     finally:
+    ...         for abc in range(10):
+    ...             continue
+    ...     print abc
+    >>> test()
+    9
+
+Start simple, a continue in a finally should not be allowed.
+
+    >>> def test():
+    ...    for abc in range(10):
+    ...        try:
+    ...            pass
+    ...        finally:
+    ...            continue
+    ...
+    Traceback (most recent call last):
+      ...
+    SyntaxError: 'continue' not supported inside 'finally' clause (<doctest test.test_syntax[36]>, line 6)
+
+This is essentially a continue in a finally which should not be allowed.
+
+    >>> def test():
+    ...    for abc in range(10):
+    ...        try:
+    ...            pass
+    ...        finally:
+    ...            try:
+    ...                continue
+    ...            except:
+    ...                pass
+    Traceback (most recent call last):
+      ...
+    SyntaxError: 'continue' not supported inside 'finally' clause (<doctest test.test_syntax[37]>, line 7)
+
+    >>> def foo():
+    ...   try:
+    ...     pass
+    ...   finally:
+    ...     continue
+    Traceback (most recent call last):
+      ...
+    SyntaxError: 'continue' not supported inside 'finally' clause (<doctest test.test_syntax[38]>, line 5)
+
+    >>> def foo():
+    ...   for a in ():
+    ...     try: pass
+    ...     finally: continue
+    Traceback (most recent call last):
+      ...
+    SyntaxError: 'continue' not supported inside 'finally' clause (<doctest test.test_syntax[39]>, line 4)
+
+    >>> def foo():
+    ...  for a in ():
+    ...   try: pass
+    ...   finally:
+    ...    try:
+    ...     continue
+    ...    finally: pass
+    Traceback (most recent call last):
+      ...
+    SyntaxError: 'continue' not supported inside 'finally' clause (<doctest test.test_syntax[40]>, line 6)
+
+    >>> def foo():
+    ...  for a in ():
+    ...   try: pass
+    ...   finally:
+    ...    try:
+    ...     pass
+    ...    except:
+    ...     continue
+    Traceback (most recent call last):
+      ...
+    SyntaxError: 'continue' not supported inside 'finally' clause (<doctest test.test_syntax[41]>, line 8)
+
 """
 
 import re