diff -wBu ppp-2.4.4_patched/pppd/ccp.c ppp-2.4.4/pppd/ccp.c
--- ppp-2.4.4_patched/pppd/ccp.c	2006-08-11 12:34:09.000000000 +0200
+++ ppp-2.4.4/pppd/ccp.c	2006-07-20 13:55:23.000000000 +0400
@@ -62,9 +62,6 @@
 static char bsd_value[8];
 static char deflate_value[8];
 
-/*
- * Option variables.
- */
 #ifdef MPPE
 static int setmppe(char **);
 static int setnomppe(void);
@@ -993,6 +988,8 @@
 		&& p[5] != ((go->mppe_128 ? MPPE_128BIT : 0) |
 			    (go->mppc ? MPPE_MPPC : 0))))
 	    return 0;
+	if (go->mppe_40 || go->mppe_56 || go->mppe_128)
+	    go->mppe = 1;
 	p += CILEN_MPPE;
 	len -= CILEN_MPPE;
 	/* Cope with first/fast ack */
@@ -1626,10 +1621,9 @@
 		if ((!ho->mppc || !ao->mppc) && !ho->mppe) {
 		    p[2] = p2;
 		    p[5] = p5;
-			newret = CONFREJ;
+		    newret = CONFNAK;
 			break;
 		    }
-    
 		/*
 		 * I have commented the code below because according to RFC1547
 		 * MTU is only information for higher level protocols about