diff -r 9228765d3e13 src/option.c
--- a/src/option.c	Sun Jul 18 23:32:13 2010 +0200
+++ b/src/option.c	Fri Jul 23 17:19:19 2010 +0900
@@ -1071,7 +1071,7 @@
     {"exrc",	    "ex",   P_BOOL|P_VI_DEF|P_SECURE,
 			    (char_u *)&p_exrc, PV_NONE,
 			    {(char_u *)FALSE, (char_u *)0L} SCRIPTID_INIT},
-    {"fileencoding","fenc", P_STRING|P_ALLOCED|P_VI_DEF|P_RSTAT|P_RBUF|P_NO_MKRC,
+    {"fileencoding","fenc", P_STRING|P_ALLOCED|P_VI_DEF|P_RSTAT|P_RBUF|P_NO_MKRC|P_NO_ML,
 #ifdef FEAT_MBYTE
 			    (char_u *)&p_fenc, PV_FENC,
 			    {(char_u *)"", (char_u *)0L}