diff --git a/mnet/lib.php b/mnet/lib.php
index 6e27a0ab954..c6c8209d021 100644
--- a/mnet/lib.php
+++ b/mnet/lib.php
@@ -56,7 +56,10 @@ function mnet_get_public_key($uri, $application=null) {
         $application = $DB->get_record('mnet_application', array('name'=>'moodle'));
     }
 
-    $rq = xmlrpc_encode_request('system/keyswap', array($CFG->wwwroot, $mnet->public_key, $application->name), array("encoding" => "utf-8"));
+    $rq = xmlrpc_encode_request('system/keyswap', array($CFG->wwwroot, $mnet->public_key, $application->name), array(
+        'encoding' => 'utf-8',
+        'escaping' => 'markup',
+    ));
     $ch = curl_init($uri . $application->xmlrpc_server_url);
 
     curl_setopt($ch, CURLOPT_TIMEOUT, 60);
diff --git a/webservice/xmlrpc/lib.php b/webservice/xmlrpc/lib.php
index 6d4820002ea..7f5e288e3ad 100644
--- a/webservice/xmlrpc/lib.php
+++ b/webservice/xmlrpc/lib.php
@@ -14,7 +14,6 @@
 // You should have received a copy of the GNU General Public License
 // along with Moodle.  If not, see <http://www.gnu.org/licenses/>.
 
-
 /**
  * Moodle XML-RPC library
  *
@@ -23,11 +22,11 @@
  * @license    http://www.gnu.org/copyleft/gpl.html GNU GPL v3 or later
  */
 
+defined('MOODLE_INTERNAL') || die();
+
 /**
  * Moodle XML-RPC client
  *
- * It has been implemented for unit testing purpose (all protocols have similar client)
- *
  * @package    webservice_xmlrpc
  * @copyright  2010 Jerome Mouneyrac
  * @license    http://www.gnu.org/copyleft/gpl.html GNU GPL v3 or later
@@ -73,15 +72,7 @@ class webservice_xmlrpc_client {
             $this->serverurl->param('wstoken', $this->token);
         }
 
-        // Set output options.
-        $outputoptions = array(
-            'encoding' => 'utf-8'
-        );
-
-        // Encode the request.
-        // See MDL-53962 - needed for backwards compatibility on <= 3.0
-        $params = array_values($params);
-        $request = xmlrpc_encode_request($functionname, $params, $outputoptions);
+        $request = $this->encode_request($functionname, $params);
 
         // Set the headers.
         $headers = array(
@@ -102,4 +93,24 @@ class webservice_xmlrpc_client {
 
         return $result;
     }
+
+    /**
+     * Generates XML for a method request.
+     *
+     * @param string $functionname Name of the method to call.
+     * @param mixed $params Method parameters compatible with the method signature.
+     * @return string
+     */
+    protected function encode_request($functionname, $params) {
+
+        $outputoptions = array(
+            'encoding' => 'utf-8',
+            'escaping' => 'markup',
+        );
+
+        // See MDL-53962 - needed for backwards compatibility on <= 3.0.
+        $params = array_values($params);
+
+        return xmlrpc_encode_request($functionname, $params, $outputoptions);
+    }
 }
diff --git a/webservice/xmlrpc/tests/lib_test.php b/webservice/xmlrpc/tests/lib_test.php
index 8adc4384f5d..6a7c7fe3428 100644
--- a/webservice/xmlrpc/tests/lib_test.php
+++ b/webservice/xmlrpc/tests/lib_test.php
@@ -88,6 +88,27 @@ class webservice_xmlrpc_test extends advanced_testcase {
         $this->expectException('moodle_exception');
         $client->call('testfunction');
     }
+
+    /**
+     * Test the XML-RPC request encoding.
+     */
+    public function test_encode_request() {
+
+        $client = new webservice_xmlrpc_client_mock('/webservice/xmlrpc/server.php', 'anytoken');
+
+        // Encode the request with the proper encoding and escaping options.
+        $xml = $client->encode_request('do_it', ['foo' => '<bar>ŠČŘŽÝÁÍÉ</bar>']);
+
+        // Assert that decoding with explicit encoding will work. This appeared
+        // to fail if the markup escaping was not set.
+        $this->assertEquals(['<bar>ŠČŘŽÝÁÍÉ</bar>'], xmlrpc_decode($xml, 'UTF-8'));
+
+        // Our experiments show that even with default/implicit encoding,
+        // requests encoded with markup escaping set are also decoded
+        // correctly. This is known to be used in some servers so we test it
+        // here, too.
+        $this->assertEquals(['<bar>ŠČŘŽÝÁÍÉ</bar>'], xmlrpc_decode($xml));
+    }
 }
 
 /**
@@ -137,4 +158,15 @@ class webservice_xmlrpc_client_mock extends webservice_xmlrpc_client {
 
         return $result;
     }
+
+    /**
+     * Allows to test the request encoding.
+     *
+     * @param string $functionname Name of the method to call.
+     * @param mixed $params Method parameters compatible with the method signature.
+     * @return string
+     */
+    public function encode_request($functionname, $params) {
+        return parent::encode_request($functionname, $params);
+    }
 }