diff --git a/admin/cli/mysql_collation.php b/admin/cli/mysql_collation.php
new file mode 100644
index 00000000000..9938a3af9f8
--- /dev/null
+++ b/admin/cli/mysql_collation.php
@@ -0,0 +1,211 @@
+<?php
+// This file is part of Moodle - http://moodle.org/
+//
+// Moodle is free software: you can redistribute it and/or modify
+// it under the terms of the GNU General Public License as published by
+// the Free Software Foundation, either version 3 of the License, or
+// (at your option) any later version.
+//
+// Moodle is distributed in the hope that it will be useful,
+// but WITHOUT ANY WARRANTY; without even the implied warranty of
+// MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the
+// GNU General Public License for more details.
+//
+// You should have received a copy of the GNU General Public License
+// along with Moodle.  If not, see <http://www.gnu.org/licenses/>.
+
+/**
+ * MySQL collation conversion tool.
+ *
+ * @package    core
+ * @copyright  2012 Petr Skoda (http://skodak.org)
+ * @license    http://www.gnu.org/copyleft/gpl.html GNU GPL v3 or later
+ */
+
+define('CLI_SCRIPT', true);
+
+require(dirname(dirname(dirname(__FILE__))).'/config.php');
+require_once($CFG->libdir.'/clilib.php');      // cli only functions
+
+if ($DB->get_dbfamily() !== 'mysql') {
+    cli_error('This function is designed for MySQL databases only!');
+}
+
+// now get cli options
+list($options, $unrecognized) = cli_get_params(array('help'=>false, 'list'=>false, 'collation'=>false, 'available'=>false),
+    array('h'=>'help', 'l'=>'list', 'a'=>'available'));
+
+if ($unrecognized) {
+    $unrecognized = implode("\n  ", $unrecognized);
+    cli_error(get_string('cliunknowoption', 'admin', $unrecognized));
+}
+
+$help =
+    "MySQL collation conversions script.
+
+It is strongly recommended to stop the web server before the conversion.
+This script may be executed before the main upgrade - 1.9.x data for example.
+
+Options:
+--collation=COLLATION Convert MySQL tables to different collation
+-l, --list            Show table and column information
+-a, --available       Show list of available collations
+-h, --help            Print out this help
+
+Example:
+\$ sudo -u www-data /usr/bin/php admin/cli/mysql_collation.php --collation=utf8_general_ci
+";
+
+if (!empty($options['collation'])) {
+    $collations = mysql_get_collations();
+    $collation = clean_param($options['collation'], PARAM_ALPHANUMEXT);
+    $collation = strtolower($collation);
+    if (!isset($collations[$collation])) {
+        cli_error("Error: collation '$collation' is not available on this server!");
+    }
+
+    echo "Converting tables and columns to '$collation' for $CFG->wwwroot:\n";
+    $prefix = $DB->get_prefix();
+    $prefix = str_replace('_', '\\_', $prefix);
+    $sql = "SHOW TABLE STATUS WHERE Name LIKE BINARY '$prefix%'";
+    $rs = $DB->get_recordset_sql($sql);
+    $converted = 0;
+    $skipped   = 0;
+    $errors    = 0;
+    foreach ($rs as $table) {
+        echo str_pad($table->name, 40). " - ";
+
+        if ($table->collation === $collation) {
+            echo "NO CHANGE\n";
+            $skipped++;
+
+        } else {
+            $DB->change_database_structure("ALTER TABLE $table->name DEFAULT COLLATE = $collation");
+            echo "CONVERTED\n";
+            $converted++;
+        }
+
+        $sql = "SHOW FULL COLUMNS FROM $table->name WHERE collation IS NOT NULL";
+        $rs2 = $DB->get_recordset_sql($sql);
+        foreach ($rs2 as $column) {
+            $column = (object)array_change_key_case((array)$column, CASE_LOWER);
+            echo '    '.str_pad($column->field, 36). " - ";
+            if ($column->collation === $collation) {
+                echo "NO CHANGE\n";
+                $skipped++;
+                continue;
+            }
+
+            if ($column->type === 'tinytext' or $column->type === 'mediumtext' or $column->type === 'text' or $column->type === 'longtext') {
+                $notnull = ($column->null === 'NO') ? 'NOT NULL' : 'NULL';
+                $default = (!is_null($column->default) and $column->default !== '') ? "DEFAULT '$column->default'" : '';
+                // primary, unique and inc are not supported for texts
+                $sql = "ALTER TABLE $table->name MODIFY COLUMN $column->field $column->type COLLATE $collation $notnull $default";
+                $DB->change_database_structure($sql);
+
+            } else if (strpos($column->type, 'varchar') === 0) {
+                $notnull = ($column->null === 'NO') ? 'NOT NULL' : 'NULL';
+                $default = !is_null($column->default) ? "DEFAULT '$column->default'" : '';
+                // primary, unique and inc are not supported for texts
+                $sql = "ALTER TABLE $table->name MODIFY COLUMN $column->field $column->type COLLATE $collation $notnull $default";
+                $DB->change_database_structure($sql);
+            } else {
+                echo "ERROR (unknown column type: $column->type)\n";
+                $error++;
+                continue;
+            }
+            echo "CONVERTED\n";
+            $converted++;
+        }
+        $rs2->close();
+    }
+    $rs->close();
+    echo "Converted: $converted, skipped: $skipped, errors: $errors\n";
+    exit(0); // success
+
+} else if (!empty($options['list'])) {
+    echo "List of tables for $CFG->wwwroot:\n";
+    $prefix = $DB->get_prefix();
+    $prefix = str_replace('_', '\\_', $prefix);
+    $sql = "SHOW TABLE STATUS WHERE Name LIKE BINARY '$prefix%'";
+    $rs = $DB->get_recordset_sql($sql);
+    $counts = array();
+    foreach ($rs as $table) {
+        if (isset($counts[$table->collation])) {
+            $counts[$table->collation]++;
+        } else {
+            $counts[$table->collation] = 1;
+        }
+        echo str_pad($table->name, 40);
+        echo $table->collation.  "\n";
+        $collations = mysql_get_column_collations($table->name);
+        foreach ($collations as $columname=>$collation) {
+            if (isset($counts[$collation])) {
+                $counts[$collation]++;
+            } else {
+                $counts[$collation] = 1;
+            }
+            echo '    ';
+            echo str_pad($columname, 36);
+            echo $collation.  "\n";
+        }
+    }
+    $rs->close();
+
+    echo "\n";
+    echo "Table collations summary for $CFG->wwwroot:\n";
+    foreach ($counts as $collation => $count) {
+        echo "$collation: $count\n";
+    }
+    exit(0); // success
+
+} else if (!empty($options['available'])) {
+    echo "List of available MySQL collations for $CFG->wwwroot:\n";
+    $collations = mysql_get_collations();
+    foreach ($collations as $collation) {
+        echo " $collation\n";
+    }
+    die;
+
+} else {
+    echo $help;
+    die;
+}
+
+
+
+// ========== Some functions ==============
+
+function mysql_get_collations() {
+    global $DB;
+
+    $collations = array();
+    $sql = "SHOW COLLATION WHERE Collation LIKE 'utf8\_%' AND Charset = 'utf8'";
+    $rs = $DB->get_recordset_sql($sql);
+    foreach ($rs as $collation) {
+        $collations[$collation->collation] = $collation->collation;
+    }
+    $rs->close();
+
+    $collation = $DB->get_dbcollation();
+    if (isset($collations[$collation])) {
+        $collations[$collation] .= ' (default)';
+    }
+
+    return $collations;
+}
+
+function mysql_get_column_collations($tablename) {
+    global $DB;
+
+    $collations = array();
+    $sql = "SELECT column_name, collation_name
+              FROM INFORMATION_SCHEMA.COLUMNS
+             WHERE table_schema = DATABASE() AND table_name = ? AND collation_name IS NOT NULL";
+    $rs = $DB->get_recordset_sql($sql, array($tablename));
+    foreach($rs as $record) {
+        $collations[$record->column_name] = $record->collation_name;
+    }
+    $rs->close();
+    return $collations;
+}
diff --git a/lib/ddl/mysql_sql_generator.php b/lib/ddl/mysql_sql_generator.php
index 6ae310f6411..abd5ddde856 100644
--- a/lib/ddl/mysql_sql_generator.php
+++ b/lib/ddl/mysql_sql_generator.php
@@ -117,23 +117,25 @@ class mysql_sql_generator extends sql_generator {
      * by any of its comments, indexes and sequence creation SQL statements.
      */
     public function getCreateTableSQL($xmldb_table) {
-        // first find out if want some special db engine
-        $engine = null;
-        if (method_exists($this->mdb, 'get_dbengine')) {
-            $engine = $this->mdb->get_dbengine();
-        }
+        // First find out if want some special db engine.
+        $engine = $this->mdb->get_dbengine();
+        // Do we know collation?
+        $collation = $this->mdb->get_dbcollation();
 
         $sqlarr = parent::getCreateTableSQL($xmldb_table);
 
-        if (!$engine) {
-            // we rely on database defaults
-            return $sqlarr;
-        }
-
-        // let's inject the engine into SQL
+        // Let's inject the extra MySQL tweaks.
         foreach ($sqlarr as $i=>$sql) {
             if (strpos($sql, 'CREATE TABLE ') === 0) {
-                $sqlarr[$i] .= " ENGINE = $engine";
+                if ($engine) {
+                    $sqlarr[$i] .= " ENGINE = $engine";
+                }
+                if ($collation) {
+                    if (strpos($collation, 'utf8_') === 0) {
+                        $sqlarr[$i] .= " DEFAULT CHARACTER SET utf8";
+                    }
+                    $sqlarr[$i] .= " DEFAULT COLLATE = $collation";
+                }
             }
         }
 
@@ -148,9 +150,26 @@ class mysql_sql_generator extends sql_generator {
      * @return array of sql statements
      */
     public function getCreateTempTableSQL($xmldb_table) {
+        // Do we know collation?
+        $collation = $this->mdb->get_dbcollation();
         $this->temptables->add_temptable($xmldb_table->getName());
-        $sqlarr = parent::getCreateTableSQL($xmldb_table); // we do not want the engine hack included in create table SQL
-        $sqlarr = preg_replace('/^CREATE TABLE (.*)/s', 'CREATE TEMPORARY TABLE $1', $sqlarr);
+
+        $sqlarr = parent::getCreateTableSQL($xmldb_table);
+
+        // Let's inject the extra MySQL tweaks.
+        foreach ($sqlarr as $i=>$sql) {
+            if (strpos($sql, 'CREATE TABLE ') === 0) {
+                // We do not want the engine hack included in create table SQL.
+                $sqlarr[$i] = preg_replace('/^CREATE TABLE (.*)/s', 'CREATE TEMPORARY TABLE $1', $sql);
+                if ($collation) {
+                    if (strpos($collation, 'utf8_') === 0) {
+                        $sqlarr[$i] .= " DEFAULT CHARACTER SET utf8";
+                    }
+                    $sqlarr[$i] .= " DEFAULT COLLATE $collation";
+                }
+            }
+        }
+
         return $sqlarr;
     }
 
@@ -231,9 +250,21 @@ class mysql_sql_generator extends sql_generator {
                     $xmldb_length='255';
                 }
                 $dbtype .= '(' . $xmldb_length . ')';
+                if ($collation = $this->mdb->get_dbcollation()) {
+                    if (strpos($collation, 'utf8_') === 0) {
+                        $dbtype .= " CHARACTER SET utf8";
+                    }
+                    $dbtype .= " COLLATE $collation";
+                }
                 break;
             case XMLDB_TYPE_TEXT:
                 $dbtype = 'LONGTEXT';
+                if ($collation = $this->mdb->get_dbcollation()) {
+                    if (strpos($collation, 'utf8_') === 0) {
+                        $dbtype .= " CHARACTER SET utf8";
+                    }
+                    $dbtype .= " COLLATE $collation";
+                }
                 break;
             case XMLDB_TYPE_BINARY:
                 $dbtype = 'LONGBLOB';
diff --git a/lib/dml/mysqli_native_moodle_database.php b/lib/dml/mysqli_native_moodle_database.php
index 93311bd5fd4..9294c07c38e 100644
--- a/lib/dml/mysqli_native_moodle_database.php
+++ b/lib/dml/mysqli_native_moodle_database.php
@@ -82,7 +82,13 @@ class mysqli_native_moodle_database extends moodle_database {
             throw new dml_connection_exception($dberr);
         }
 
-        $result = $conn->query("CREATE DATABASE $dbname DEFAULT CHARACTER SET utf8 COLLATE utf8_unicode_ci");
+        if (isset($dboptions['dbcollation']) and strpos($dboptions['dbcollation'], 'utf8_') === 0) {
+            $collation = $dboptions['dbcollation'];
+        } else {
+            $collation = 'utf8_unicode_ci';
+        }
+
+        $result = $conn->query("CREATE DATABASE $dbname DEFAULT CHARACTER SET utf8 DEFAULT COLLATE ".$collation);
 
         $conn->close();
 
@@ -146,22 +152,28 @@ class mysqli_native_moodle_database extends moodle_database {
             return $this->dboptions['dbengine'];
         }
 
-        $engine = null;
-
-        if (!$this->external) {
-            // look for current engine of our config table (the first table that gets created),
-            // so that we create all tables with the same engine
-            $sql = "SELECT engine FROM INFORMATION_SCHEMA.TABLES WHERE table_schema = DATABASE() AND table_name = '{$this->prefix}config'";
-            $this->query_start($sql, NULL, SQL_QUERY_AUX);
-            $result = $this->mysqli->query($sql);
-            $this->query_end($result);
-            if ($rec = $result->fetch_assoc()) {
-                $engine = $rec['engine'];
-            }
-            $result->close();
+        if ($this->external) {
+            return null;
         }
 
+        $engine = null;
+
+        // Look for current engine of our config table (the first table that gets created),
+        // so that we create all tables with the same engine.
+        $sql = "SELECT engine
+                  FROM INFORMATION_SCHEMA.TABLES
+                 WHERE table_schema = DATABASE() AND table_name = '{$this->prefix}config'";
+        $this->query_start($sql, NULL, SQL_QUERY_AUX);
+        $result = $this->mysqli->query($sql);
+        $this->query_end($result);
+        if ($rec = $result->fetch_assoc()) {
+            $engine = $rec['engine'];
+        }
+        $result->close();
+
         if ($engine) {
+            // Cache the result to improve performance.
+            $this->dboptions['dbengine'] = $engine;
             return $engine;
         }
 
@@ -175,7 +187,7 @@ class mysqli_native_moodle_database extends moodle_database {
         }
         $result->close();
 
-        if (!$this->external and $engine === 'MyISAM') {
+        if ($engine === 'MyISAM') {
             // we really do not want MyISAM for Moodle, InnoDB or XtraDB is a reasonable defaults if supported
             $sql = "SHOW STORAGE ENGINES";
             $this->query_start($sql, NULL, SQL_QUERY_AUX);
@@ -196,9 +208,77 @@ class mysqli_native_moodle_database extends moodle_database {
             }
         }
 
+        // Cache the result to improve performance.
+        $this->dboptions['dbengine'] = $engine;
         return $engine;
     }
 
+    /**
+     * Returns the current MySQL db collation.
+     *
+     * This is an ugly workaround for MySQL default collation problems.
+     *
+     * @return string or null MySQL collation name
+     */
+    public function get_dbcollation() {
+        if (isset($this->dboptions['dbcollation'])) {
+            return $this->dboptions['dbcollation'];
+        }
+        if ($this->external) {
+            return null;
+        }
+
+        $collation = null;
+
+        // Look for current collation of our config table (the first table that gets created),
+        // so that we create all tables with the same collation.
+        $sql = "SELECT collation_name
+                  FROM INFORMATION_SCHEMA.COLUMNS
+                 WHERE table_schema = DATABASE() AND table_name = '{$this->prefix}config' AND column_name = 'value'";
+        $this->query_start($sql, NULL, SQL_QUERY_AUX);
+        $result = $this->mysqli->query($sql);
+        $this->query_end($result);
+        if ($rec = $result->fetch_assoc()) {
+            $collation = $rec['collation_name'];
+        }
+        $result->close();
+
+        if (!$collation) {
+            // Get the default database collation, but only if using UTF-8.
+            $sql = "SELECT @@collation_database";
+            $this->query_start($sql, NULL, SQL_QUERY_AUX);
+            $result = $this->mysqli->query($sql);
+            $this->query_end($result);
+            if ($rec = $result->fetch_assoc()) {
+                if (strpos($rec['@@collation_database'], 'utf8_') === 0) {
+                    $collation = $rec['@@collation_database'];
+                }
+            }
+            $result->close();
+        }
+
+        if (!$collation) {
+            // We want only utf8 compatible collations.
+            $collation = null;
+            $sql = "SHOW COLLATION WHERE Collation LIKE 'utf8\_%' AND Charset = 'utf8'";
+            $this->query_start($sql, NULL, SQL_QUERY_AUX);
+            $result = $this->mysqli->query($sql);
+            $this->query_end($result);
+            while ($res = $result->fetch_assoc()) {
+                $collation = $res['Collation'];
+                if (strtoupper($res['Default']) === 'YES') {
+                    $collation = $res['Collation'];
+                    break;
+                }
+            }
+            $result->close();
+        }
+
+        // Cache the result to improve performance.
+        $this->dboptions['dbcollation'] = $collation;
+        return $collation;
+    }
+
     /**
      * Returns localised database type name
      * Note: can be used before connect()