Fixed scala-ide#269.

scalariform/src/main/scala/scalariform/formatter/ExprFormatter.scala

@@ -845,8 +845,10 @@ trait ExprFormatter { self: HasFormattingPreferences with AnnotationFormatter wi
     var formatResult: FormatResult = NoFormatResult
 
     val (instruction, subStatState) =
-      if (hasNestedAnonymousFunction(body))
+      if (hasNestedAnonymousFunction(body) && formattingPreferences(NewlinesAtNestedAnonymousFunctions) == Prevent)
         (CompactEnsuringGap, formatterState.indent(-1))
+      else if (hasNestedAnonymousFunction(body) && formattingPreferences(NewlinesAtNestedAnonymousFunctions) == Force)
+        (EnsureNewlineAndIndent(1, Some(parentBlock.firstToken)), formatterState.indent)
       else if (hiddenPredecessors(parameters.head.firstToken).containsNewline)
         (indentedInstruction, formatterState.indent)
       else
@@ -855,18 +857,23 @@ trait ExprFormatter { self: HasFormattingPreferences with AnnotationFormatter wi
     formatResult = formatResult.before(parentBlock.firstToken, instruction)
     formatResult ++= format(parameters)
 
+    var bodyState = subStatState
+
     for (firstToken ← body.firstTokenOption) {
-      val instruction =
-        if (hasNestedAnonymousFunction(body))
-          CompactEnsuringGap
+      val (instruction, newState) =
+        if (hasNestedAnonymousFunction(body) && formattingPreferences(NewlinesAtNestedAnonymousFunctions) == Prevent)
+          (CompactEnsuringGap, subStatState)
+        else if (hasNestedAnonymousFunction(body) && formattingPreferences(NewlinesAtNestedAnonymousFunctions) == Preserve && !hiddenPredecessors(firstToken).containsNewline)
+          (CompactEnsuringGap, subStatState.indent(-1))
         else if (hiddenPredecessors(firstToken).containsNewline || containsNewline(body))
-          statFormatterState(body.firstStatOpt)(subStatState).currentIndentLevelInstruction
+          (statFormatterState(body.firstStatOpt)(subStatState).currentIndentLevelInstruction, subStatState)
         else
-          CompactEnsuringGap
+          (CompactEnsuringGap, subStatState)
       formatResult = formatResult.before(firstToken, instruction)
+      bodyState = newState
     }
 
-    formatResult ++= format(body)(subStatState)
+    formatResult ++= format(body)(bodyState)
 
     formatResult
   }

scalariform/src/test/scala/scalariform/formatter/NestedAnonymousFunctionsTest.scala

@@ -0,0 +1,67 @@
+package scalariform.formatter
+
+import scalariform.formatter.preferences._
+import scalariform.parser._
+
+
+class NestedAnonymousFunctionsTest extends AbstractFormatterTest {
+  // format: OFF
+  {
+    implicit val formattingPreferences = FormattingPreferences
+      .setPreference(NewlinesAtNestedAnonymousFunctions, Force)
+
+    """def foo: Int => Int => String = { x: Int => y: Int =>
+      |  "x"
+      |}""" ==>
+      """def foo: Int => Int => String = {
+        |  x: Int =>
+        |    y: Int =>
+        |      "x"
+        |}"""
+  }
+
+  {
+    implicit val formattingPreferences = FormattingPreferences
+      .setPreference(NewlinesAtNestedAnonymousFunctions, Prevent)
+
+    """def bar: Int => Int => String = {
+      |  x: Int =>
+      |    y: Int =>
+      |      "x"
+      |}""" ==>
+      """def bar: Int => Int => String = { x: Int => y: Int =>
+        |  "x"
+        |}"""
+  }
+
+  {
+    implicit val formattingPreferences = FormattingPreferences
+      .setPreference(NewlinesAtNestedAnonymousFunctions, Preserve)
+
+    """def baz: Int => Int => String = { x: Int =>
+      |  y: Int =>
+      |    "x"
+      |}""" ==>
+      """def baz: Int => Int => String = { x: Int =>
+        |  y: Int =>
+        |    "x"
+        |}"""
+
+    """def quux: Int => Int => String = { x: Int => y: Int =>
+      |  "x"
+      |}""" ==>
+      """def quux: Int => Int => String = { x: Int => y: Int =>
+        |  "x"
+        |}"""
+  }
+  //  format: ON
+
+  override val debug = false
+
+  def parse(parser: ScalaParser) = parser.nonLocalDefOrDcl()
+
+  type Result = FullDefOrDcl
+
+  def format(formatter: ScalaFormatter, result: Result) = formatter.format(result)(FormatterState())
+
+}