Then I think hugs and nhc98 are wrong. The report states that the unliterate version of the file is recovered by "taking only those lines beginning with '>', and removing the first character of those lines", which would leave the lines indented by a single space, not two.
This would appear to be an un-remarked change to the Report since version 1.2. That version states that "program lines have the leading '>' replaced by a leading space, to preserve tab alignments". Version 1.3 removed this specification, and the changed specification only appeared in Haskell'98. I would like to submit it as a bug in the Report - the older specification, as implemented by Hugs and nhc98 makes more sense in conjunction with the layout rule. Regards, Malcolm