diff --git a/src/net/java/sip/communicator/plugin/otr/OtrContactMenu.java b/src/net/java/sip/communicator/plugin/otr/OtrContactMenu.java
index dc2beb637..721e9704a 100644
--- a/src/net/java/sip/communicator/plugin/otr/OtrContactMenu.java
+++ b/src/net/java/sip/communicator/plugin/otr/OtrContactMenu.java
@@ -121,25 +121,68 @@ public OtrContactMenu(  OtrContact otrContact,
          * Since we now support OTRv3 we have to make sure that the user's
          * cached policy is up-to-date with the latest allowed version of the
          * protocol. We have to set the ALLOW_V3 bit manually for the users.
+         * 
+         * UPDATE: The WHITESPACE_START_AKE bit should also be manually set
+         * for any user that have all three ALLOW_V bits set to 1.
+         * 
+         * All of this is needed because the old users have cached otr policies
+         * that would not benefit from the recently updated otr functionality
+         * if these policies are not properly updated.
          */
+        updateOldOtrPoliciesIfNeeded(otrContact);
+
+        buildMenu();
+    }
+
+    private void updateOldOtrPoliciesIfNeeded(OtrContact otrContact)
+    {
         OtrPolicy policy =
             OtrActivator.scOtrEngine.getContactPolicy(otrContact.contact);
+
+        /*
+         * This flag is used to indicate whether there are changes in the
+         * current policy or not. If there are not any changes then we don't
+         * have to access the configuration service and re-cache the policy.
+         * This greatly optimizes performance on big configurations.
+         */
+        boolean isChangedFlag = false;
+
         if (policy.getAllowV1() && policy.getAllowV2() && !policy.getAllowV3())
         {
             policy.setAllowV3(true);
+            isChangedFlag = true;
+        }
+
+        if (policy.getEnableManual() && !policy.getWhitespaceStartAKE())
+        {
+            policy.setWhitespaceStartAKE(true);
+            isChangedFlag = true;
+        }
+
+        if (isChangedFlag)
+        {
             OtrActivator.scOtrEngine.setContactPolicy(contact.contact, policy);
         }
 
         policy = OtrActivator.scOtrEngine.getGlobalPolicy();
+        isChangedFlag = false;
         if (policy.getAllowV1() && policy.getAllowV2() && !policy.getAllowV3())
         {
             policy.setAllowV3(true);
-            OtrActivator.scOtrEngine.setGlobalPolicy(policy);
+            isChangedFlag = true;
         }
 
-        buildMenu();
-    }
+        if (policy.getEnableManual() && !policy.getWhitespaceStartAKE())
+        {
+            policy.setWhitespaceStartAKE(true);
+            isChangedFlag = true;
+        }
 
+        if (isChangedFlag)
+        {
+            OtrActivator.scOtrEngine.setGlobalPolicy(policy);
+        }
+    }
     /*
      * Implements ActionListener#actionPerformed(ActionEvent).
      */