diff --git a/build.gradle b/build.gradle
index a653379dd73..0185c5af1de 100644
--- a/build.gradle
+++ b/build.gradle
@@ -24,7 +24,7 @@ ext {
     commonsCollectionsVersion = "3.2.1"
     commonsIOVersion = "2.1"
     commonsLangVersion = "2.6"
-    datastoreVersion = "1.0.7.RELEASE"
+    datastoreVersion = "1.0.9.RELEASE"
     gantVersion = "1.9.6"
     gdocEngineVersion = "1.0.1"
     groovyVersion = "1.8.6"
diff --git a/grails-bootstrap/src/main/groovy/org/codehaus/groovy/grails/resolve/GrailsCoreDependencies.java b/grails-bootstrap/src/main/groovy/org/codehaus/groovy/grails/resolve/GrailsCoreDependencies.java
index 50bf0c1a967..1c3be841469 100644
--- a/grails-bootstrap/src/main/groovy/org/codehaus/groovy/grails/resolve/GrailsCoreDependencies.java
+++ b/grails-bootstrap/src/main/groovy/org/codehaus/groovy/grails/resolve/GrailsCoreDependencies.java
@@ -192,7 +192,7 @@ public Object doCall() {
                         };
                         registerDependencies(dependencyManager, compileTimeDependenciesMethod, commonsExcludingLoggingAndXmlApis, "commons-logging", "xml-apis", "commons-digester");
 
-                        String datastoreMappingVersion = "1.0.7.RELEASE";
+                        String datastoreMappingVersion = "1.0.9.RELEASE";
                         ModuleRevisionId[] compileDependencies = {
                             ModuleRevisionId.newInstance("aopalliance", "aopalliance", "1.0"),
                             ModuleRevisionId.newInstance("com.googlecode.concurrentlinkedhashmap", "concurrentlinkedhashmap-lru", "1.2_jdk5"),
diff --git a/grails-web/src/main/groovy/org/codehaus/groovy/grails/web/pages/GroovyPageBinding.java b/grails-web/src/main/groovy/org/codehaus/groovy/grails/web/pages/GroovyPageBinding.java
index 1dd639e37ab..e9a400727f6 100644
--- a/grails-web/src/main/groovy/org/codehaus/groovy/grails/web/pages/GroovyPageBinding.java
+++ b/grails-web/src/main/groovy/org/codehaus/groovy/grails/web/pages/GroovyPageBinding.java
@@ -151,7 +151,7 @@ private void internalSetVariable(Binding bindingToUse, String name, Object value
         if (!GroovyPage.isReservedName(name)) {
             if (bindingToUse == null) {
                 bindingToUse = findBindingForVariable(name);
-                if (bindingToUse == null || (bindingToUse instanceof GroovyPageBinding && ((GroovyPageBinding)bindingToUse).isRoot())) {
+                if (bindingToUse == null || (bindingToUse instanceof GroovyPageBinding && ((GroovyPageBinding)bindingToUse).shouldUseChildBinding(this))) {
                     bindingToUse = this;
                 }
             }
@@ -172,6 +172,15 @@ private void internalSetVariable(Binding bindingToUse, String name, Object value
         }
     }
 
+    private boolean shouldUseChildBinding(GroovyPageBinding childBinding) {
+        return isRoot() || hasSameOwnerClass(childBinding);
+    }
+
+    private boolean hasSameOwnerClass(GroovyPageBinding otherBinding) {
+        // owner class can be same in recursive rendering; in that case, the child binding should be used for setting variable values
+        return (getOwner() != null && otherBinding.getOwner() != null && getOwner().getClass()==otherBinding.getOwner().getClass());
+    }
+
     public String getPluginContextPath() {
         return (String)getVariable(GroovyPage.PLUGIN_CONTEXT_PATH);
     }
diff --git a/grails-web/src/main/groovy/org/codehaus/groovy/grails/web/pages/GroovyPageWritable.java b/grails-web/src/main/groovy/org/codehaus/groovy/grails/web/pages/GroovyPageWritable.java
index 626077b0c02..8ff3189a9e8 100644
--- a/grails-web/src/main/groovy/org/codehaus/groovy/grails/web/pages/GroovyPageWritable.java
+++ b/grails-web/src/main/groovy/org/codehaus/groovy/grails/web/pages/GroovyPageWritable.java
@@ -135,10 +135,7 @@ public Writer writeTo(Writer out) throws IOException {
             boolean newParentCreated = false;
 
             if (hasRequest) {
-                boolean isIncludeRequest = WebUtils.isIncludeRequest(request);
-                if(!isIncludeRequest) {
-                    parentBinding = (GroovyPageBinding) request.getAttribute(GrailsApplicationAttributes.PAGE_SCOPE);
-                }
+                parentBinding = (GroovyPageBinding) request.getAttribute(GrailsApplicationAttributes.PAGE_SCOPE);
                 if (parentBinding == null) {
                     if (webRequest != null) {
                         parentBinding = new GroovyPageBinding(new GroovyPageRequestBinding(webRequest));
diff --git a/grails-web/src/main/groovy/org/codehaus/groovy/grails/web/util/WebUtils.java b/grails-web/src/main/groovy/org/codehaus/groovy/grails/web/util/WebUtils.java
index 5551b2eaced..21e3216d990 100644
--- a/grails-web/src/main/groovy/org/codehaus/groovy/grails/web/util/WebUtils.java
+++ b/grails-web/src/main/groovy/org/codehaus/groovy/grails/web/util/WebUtils.java
@@ -49,6 +49,7 @@
 import org.codehaus.groovy.grails.web.servlet.mvc.GrailsParameterMap;
 import org.codehaus.groovy.grails.web.servlet.mvc.GrailsWebRequest;
 import org.codehaus.groovy.grails.web.servlet.mvc.exceptions.ControllerExecutionException;
+import org.codehaus.groovy.grails.web.sitemesh.GrailsLayoutDecoratorMapper;
 import org.springframework.context.ApplicationContext;
 import org.springframework.util.Assert;
 import org.springframework.web.context.WebApplicationContext;
@@ -335,8 +336,19 @@ public static IncludedContent includeForUrlMappingInfo(HttpServletRequest reques
         ModelAndView currentMv = null;
         Binding currentPageBinding = null;
         Map currentParams = null;
+        Object currentLayoutAttribute = null;
+        Object currentRenderingView = null;
         if (webRequest != null) {
             currentPageBinding = (Binding) webRequest.getAttribute(GrailsApplicationAttributes.PAGE_SCOPE, 0);
+            webRequest.removeAttribute(GrailsApplicationAttributes.PAGE_SCOPE, 0);
+            currentLayoutAttribute = webRequest.getAttribute(GrailsLayoutDecoratorMapper.LAYOUT_ATTRIBUTE, 0);
+            if(currentLayoutAttribute != null) {
+                webRequest.removeAttribute(GrailsLayoutDecoratorMapper.LAYOUT_ATTRIBUTE, 0);
+            }
+            currentRenderingView = webRequest.getAttribute(GrailsLayoutDecoratorMapper.RENDERING_VIEW, 0);
+            if(currentRenderingView != null) {
+                webRequest.removeAttribute(GrailsLayoutDecoratorMapper.RENDERING_VIEW, 0);
+            }
             currentController = webRequest.getControllerName();
             currentAction = webRequest.getActionName();
             currentId = webRequest.getId();
@@ -356,6 +368,12 @@ public static IncludedContent includeForUrlMappingInfo(HttpServletRequest reques
         finally {
             if (webRequest!=null) {
                 webRequest.setAttribute(GrailsApplicationAttributes.PAGE_SCOPE,currentPageBinding, 0);
+                if(currentLayoutAttribute != null) {
+                    webRequest.setAttribute(GrailsLayoutDecoratorMapper.LAYOUT_ATTRIBUTE, currentLayoutAttribute, 0);
+                }
+                if(currentRenderingView != null) {
+                    webRequest.setAttribute(GrailsLayoutDecoratorMapper.RENDERING_VIEW, currentRenderingView, 0);
+                }
                 webRequest.getParameterMap().clear();
                 webRequest.getParameterMap().putAll(currentParams);
                 webRequest.setId(currentId);