diff --git a/libxslt/transform.c b/libxslt/transform.c
index de2ef3c3..35701dea 100644
--- a/libxslt/transform.c
+++ b/libxslt/transform.c
@@ -4075,7 +4075,7 @@ xsltElement(xsltTransformContextPtr ctxt, xmlNodePtr node,
         } else if (xmlStrEqual(prefix, BAD_CAST "xml")) {
             prefix = NULL;
         }
-    } else if (prefix != NULL) {
+    } else {
 	xmlNsPtr ns;
 	/*
 	* SPEC XSLT 1.0:
@@ -4090,11 +4090,13 @@ xsltElement(xsltTransformContextPtr ctxt, xmlNodePtr node,
 	    * TODO: Check this in the compilation layer in case it's a
 	    * static value.
 	    */
-            xsltTransformError(ctxt, NULL, inst,
-                "xsl:element: The QName '%s:%s' has no "
-                "namespace binding in scope in the stylesheet; "
-                "this is an error, since the namespace was not "
-                "specified by the instruction itself.\n", prefix, name);
+            if (prefix != NULL) {
+                xsltTransformError(ctxt, NULL, inst,
+                    "xsl:element: The QName '%s:%s' has no "
+                    "namespace binding in scope in the stylesheet; "
+                    "this is an error, since the namespace was not "
+                    "specified by the instruction itself.\n", prefix, name);
+            }
 	} else
 	    nsName = ns->href;
     }
diff --git a/tests/docs/Makefile.am b/tests/docs/Makefile.am
index 9e2204ff..12a97a8a 100644
--- a/tests/docs/Makefile.am
+++ b/tests/docs/Makefile.am
@@ -168,6 +168,7 @@ EXTRA_DIST =	\
 	bug-167.xml \
 	bug-168.xml \
 	bug-169.xml \
+	bug-179.xml \
 	character.xml \
 	array.xml \
 	items.xml
diff --git a/tests/docs/bug-179.xml b/tests/docs/bug-179.xml
new file mode 100644
index 00000000..69d62f2c
--- /dev/null
+++ b/tests/docs/bug-179.xml
@@ -0,0 +1 @@
+<doc/>
diff --git a/tests/general/Makefile.am b/tests/general/Makefile.am
index 364fdd9d..762eca9f 100644
--- a/tests/general/Makefile.am
+++ b/tests/general/Makefile.am
@@ -186,6 +186,7 @@ EXTRA_DIST = \
     bug-176.out bug-176.xsl \
     bug-177.out bug-177.xsl \
     bug-178.out bug-178.xsl \
+    bug-179.out bug-179.xsl \
     character.out character.xsl \
     character2.out character2.xsl \
     itemschoose.out itemschoose.xsl \
diff --git a/tests/general/bug-179.out b/tests/general/bug-179.out
new file mode 100644
index 00000000..0a7e67d1
--- /dev/null
+++ b/tests/general/bug-179.out
@@ -0,0 +1,9 @@
+<?xml version="1.0"?>
+<root xmlns="my::namespace">
+  <foo>...</foo>
+  <bar>...</bar>
+  <foobar>...</foobar>
+  <baz>...</baz>
+  <doc>...</doc>
+  <baz>...</baz>
+</root>
diff --git a/tests/general/bug-179.xsl b/tests/general/bug-179.xsl
new file mode 100644
index 00000000..5847e9a0
--- /dev/null
+++ b/tests/general/bug-179.xsl
@@ -0,0 +1,24 @@
+<xsl:stylesheet version="1.0" xmlns:xsl="http://www.w3.org/1999/XSL/Transform"
+                              xmlns="my::namespace">
+
+<xsl:variable name="var">baz</xsl:variable>
+
+<xsl:output indent="yes"/>
+
+<xsl:template match="/">
+    <root> <!-- This is in the correct namespace "my::namespace" -->
+        <foo>...</foo> <!-- OK. -->
+        <xsl:element name="bar">...</xsl:element> <!-- Still okay. -->
+
+        <!-- Wrong! These are without namespace. -->
+        <xsl:element name="{concat('foo', 'bar')}">...</xsl:element>
+        <xsl:element name="{$var}">...</xsl:element>
+        <xsl:element name="{local-name(*)}">...</xsl:element>
+
+        <!-- Explicitly setting the namespace fixes this. -->
+        <xsl:element name="{$var}" namespace="my::namespace">...</xsl:element>
+    </root>
+</xsl:template>
+
+</xsl:stylesheet>
+