diff --git a/rhodecode/lib/vcs/utils/hgcompat.py b/rhodecode/lib/vcs/utils/hgcompat.py
--- a/rhodecode/lib/vcs/utils/hgcompat.py
+++ b/rhodecode/lib/vcs/utils/hgcompat.py
@@ -3,6 +3,9 @@ Mercurial libs compatibility
 """
 
 import mercurial
+import mercurial.demandimport
+## patch demandimport, due to bug in mercurial when it allways triggers demandimport.enable()
+mercurial.demandimport.enable = lambda *args, **kwargs: 1
 from mercurial import archival, merge as hg_merge, patch, ui
 from mercurial import discovery
 from mercurial import localrepo