diff --git a/clientloop.c b/clientloop.c
index 7e6fe26..e8cd499 100644
--- a/clientloop.c
+++ b/clientloop.c
@@ -59,7 +59,7 @@
  */
 
 #include "includes.h"
-RCSID("$OpenBSD: clientloop.c,v 1.85 2001/10/24 08:51:35 markus Exp $");
+RCSID("$OpenBSD: clientloop.c,v 1.86 2001/10/24 19:57:40 markus Exp $");
 
 #include "ssh.h"
 #include "ssh1.h"
@@ -522,14 +522,36 @@
 				continue;
 
 			case '&':
-				/* XXX does not work yet with proto 2 */
-				if (compat20)
-					continue;
 				/*
 				 * Detach the program (continue to serve connections,
 				 * but put in background and no more new connections).
 				 */
-				if (!stdin_eof) {
+				/* Restore tty modes. */
+				leave_raw_mode();
+
+				/* Stop listening for new connections. */
+				channel_stop_listening();
+
+				snprintf(string, sizeof string,
+				    "%c& [backgrounded]\n", escape_char);
+				buffer_append(berr, string, strlen(string));
+
+				/* Fork into background. */
+				pid = fork();
+				if (pid < 0) {
+					error("fork: %.100s", strerror(errno));
+					continue;
+				}
+				if (pid != 0) {	/* This is the parent. */
+					/* The parent just exits. */
+					exit(0);
+				}
+				/* The child continues serving connections. */
+				if (compat20) {
+					buffer_append(bin, "\004", 1);
+					/* fake EOF on stdin */
+					return -1;
+				} else if (!stdin_eof) {
 					/*
 					 * Sending SSH_CMSG_EOF alone does not always appear
 					 * to be enough.  So we try to send an EOF character
@@ -545,26 +567,7 @@
 						packet_send();
 					}
 				}
-				/* Restore tty modes. */
-				leave_raw_mode();
-
-				/* Stop listening for new connections. */
-				channel_close_all();	/* proto1 only XXXX */
-
-				printf("%c& [backgrounded]\n", escape_char);
-
-				/* Fork into background. */
-				pid = fork();
-				if (pid < 0) {
-					error("fork: %.100s", strerror(errno));
-					continue;
-				}
-				if (pid != 0) {	/* This is the parent. */
-					/* The parent just exits. */
-					exit(0);
-				}
-				/* The child continues serving connections. */
-				continue; /*XXX ? */
+				continue;
 
 			case '?':
 				snprintf(string, sizeof string,