diff --git a/config-dist.php b/config-dist.php
index b28ce14cfb8..ccdefda0e6e 100644
--- a/config-dist.php
+++ b/config-dist.php
@@ -110,7 +110,7 @@ $CFG->dataroot  = '/home/example/moodledata';
 // to make sure the web server process (eg Apache) can access the files.
 // NOTE: the prefixed 0 is important, and don't use quotes.
 
-$CFG->directorypermissions = 0777;
+$CFG->directorypermissions = 02777;
 
 
 //=========================================================================
diff --git a/install.php b/install.php
index 62bba9b3011..17f1b64cf10 100644
--- a/install.php
+++ b/install.php
@@ -68,7 +68,7 @@ if ( empty($INSTALL['language']) and empty($_POST['language']) ) {
 $SESSION->lang = (!empty($_POST['language'])) ? $_POST['language'] : $INSTALL['language'];
 $CFG->dirroot = $INSTALL['dirroot'];
 $CFG->dataroot = $INSTALL['dataroot'];
-$CFG->directorypermissions = 0777;
+$CFG->directorypermissions = 02777;
 
 
 /// Include some moodle libraries
@@ -306,7 +306,7 @@ if ($nextstage == 5) {
     $str .= '$CFG->admin     = \''.$INSTALL['admindirname']."';\r\n";
     $str .= "\r\n";
 
-    $str .= '$CFG->directorypermissions = 0777;'."\r\n";
+    $str .= '$CFG->directorypermissions = 02777;'."\r\n";
     $str .= "\r\n";
 
     $str .= 'require_once("$CFG->dirroot/lib/setup.php");'."\r\n";
diff --git a/lib/moodlelib.php b/lib/moodlelib.php
index 362ae3ca795..9c2b498a4ee 100644
--- a/lib/moodlelib.php
+++ b/lib/moodlelib.php
@@ -2579,7 +2579,7 @@ function make_upload_directory($directory, $shownotices=true) {
                 }
                 return false;
             }
-            @chmod($currdir, $CFG->directorypermissions);  // Just in case mkdir didn't do it
+            //@chmod($currdir, $CFG->directorypermissions);  // Just in case mkdir didn't do it
         }
     }