diff --git a/ghc/tests/simplCore/should_compile/simpl005.hs b/ghc/tests/simplCore/should_compile/simpl005.hs
new file mode 100644
index 0000000000000000000000000000000000000000..f342bd524f910f66abdc76e37d61d77ef1bb22c0
--- /dev/null
+++ b/ghc/tests/simplCore/should_compile/simpl005.hs
@@ -0,0 +1,25 @@
+--!!! CPR on newtype with polymorphic argument
+
+{-# OPTIONS -O #-}
+
+module ShouldCompile where
+
+data StateM m s a = STM (s -> m (a,s)) 
+
+instance Functor m => Functor (StateM m s) where
+  fmap f (STM xs) =  STM (\s -> fmap (\ (x,s') -> (f x, s')) 
+                    		     (xs s)                                
+		         )
+{-	With GHC 4.04 (first release) this program gave:
+
+  panic! (the `impossible' happened):
+          mk_cpr_let: not a product
+      forall a{-ruq-} b{-rur-}.
+      (a{-ruq-} -> b{-rur-})
+      -> MonadLibrary.StateM{-r2o,x-} m{-a30Y-} s{-a30Z-} a{-ruq-}
+      -> MonadLibrary.StateM{-r2o,x-} m{-a30Y-} s{-a30Z-} b{-rur-}
+
+ The reason: 'Functor' is a newtype, whose element is a for-all type.
+
+	newtype Functor f = Functor (forall a,b.  (a->b) -> f a -> f b)
+-}
diff --git a/ghc/tests/simplCore/should_compile/simpl005.stderr b/ghc/tests/simplCore/should_compile/simpl005.stderr
new file mode 100644
index 0000000000000000000000000000000000000000..e69de29bb2d1d6434b8b29ae775ad8c2e48c5391