diff --git a/Misc/NEWS b/Misc/NEWS
index 7c413d6..893b8ac 100644
--- a/Misc/NEWS
+++ b/Misc/NEWS
@@ -12,6 +12,9 @@
 Core and builtins
 -----------------
 
+- The compilation of a class nested in another class used to leak one
+  reference on the outer class name.
+
 - Patch #1810: compile() can now compile _ast trees as returned by
   compile(..., PyCF_ONLY_AST).
 
diff --git a/Python/compile.c b/Python/compile.c
index 4f55b36..ae1f0da 100644
--- a/Python/compile.c
+++ b/Python/compile.c
@@ -1431,6 +1431,7 @@
 	if (!compiler_enter_scope(c, s->v.ClassDef.name, (void *)s,
 				  s->lineno))
 		return 0;
+	Py_XDECREF(c->u->u_private);
 	c->u->u_private = s->v.ClassDef.name;
 	Py_INCREF(c->u->u_private);
 	str = PyString_InternFromString("__name__");