diff --git a/images/images.qrc b/images/images.qrc
index 5e08dd3a9687..48bde211e4f0 100644
--- a/images/images.qrc
+++ b/images/images.qrc
@@ -121,6 +121,7 @@
         <file>themes/default/mActionAddArrow.png</file>
         <file>themes/default/mActionAddBasicShape.png</file>
         <file>themes/default/mActionAddGPSLayer.png</file>
+        <file>themes/default/mActionAddGroup.png</file>
         <file>themes/default/mActionAddHtml.png</file>
         <file>themes/default/mActionAddImage.png</file>
         <file>themes/default/mActionAddLayer.png</file>
diff --git a/images/themes/default/mActionAddGroup.png b/images/themes/default/mActionAddGroup.png
new file mode 100644
index 000000000000..dc1f6e825f3a
Binary files /dev/null and b/images/themes/default/mActionAddGroup.png differ
diff --git a/src/app/composer/qgscomposerlegendwidget.cpp b/src/app/composer/qgscomposerlegendwidget.cpp
index 46c043a45bd6..8db3332dce48 100644
--- a/src/app/composer/qgscomposerlegendwidget.cpp
+++ b/src/app/composer/qgscomposerlegendwidget.cpp
@@ -716,7 +716,7 @@ void QgsComposerLegendWidget::on_mEditPushButton_clicked()
     return;
   }
 
-  QStandardItem* currentItem = itemModel->itemFromIndex( currentIndex );
+  QgsComposerLegendItem* currentItem = dynamic_cast<QgsComposerLegendItem *>( itemModel->itemFromIndex( currentIndex ) );
   if ( !currentItem )
   {
     return;
@@ -725,7 +725,8 @@ void QgsComposerLegendWidget::on_mEditPushButton_clicked()
   QgsComposerLegendItemDialog itemDialog( currentItem );
   if ( itemDialog.exec() == QDialog::Accepted )
   {
-    currentItem->setText( itemDialog.itemText() );
+    currentItem->setUserText( itemDialog.itemText() );
+    mLegend->model()->updateItemText( currentItem );
   }
 
   mLegend->beginCommand( tr( "Legend item edited" ) );
@@ -822,7 +823,7 @@ void QgsComposerLegendWidget::on_mUpdateAllPushButton_clicked()
   updateLegend();
 }
 
-void QgsComposerLegendWidget::on_mAddGroupButton_clicked()
+void QgsComposerLegendWidget::on_mAddGroupToolButton_clicked()
 {
   if ( mLegend && mLegend->model() )
   {
diff --git a/src/app/composer/qgscomposerlegendwidget.h b/src/app/composer/qgscomposerlegendwidget.h
index 07f3aca8be36..de64284a6b3a 100644
--- a/src/app/composer/qgscomposerlegendwidget.h
+++ b/src/app/composer/qgscomposerlegendwidget.h
@@ -82,7 +82,7 @@ class QgsComposerLegendWidget: public QWidget, private Ui::QgsComposerLegendWidg
     void on_mCountToolButton_clicked( bool checked );
     void on_mUpdatePushButton_clicked();
     void on_mUpdateAllPushButton_clicked();
-    void on_mAddGroupButton_clicked();
+    void on_mAddGroupToolButton_clicked();
 
     void selectedChanged( const QModelIndex & current, const QModelIndex & previous );
 
diff --git a/src/core/composer/qgscomposerlegenditem.cpp b/src/core/composer/qgscomposerlegenditem.cpp
index 93516e1cc526..40a7c9617ba5 100644
--- a/src/core/composer/qgscomposerlegenditem.cpp
+++ b/src/core/composer/qgscomposerlegenditem.cpp
@@ -105,6 +105,7 @@ void QgsComposerSymbolV2Item::writeXML( QDomElement& elem, QDomDocument& doc ) c
     vectorClassElem.appendChild( symbolsElem );
   }
   vectorClassElem.setAttribute( "text", text() );
+  vectorClassElem.setAttribute( "userText", userText() );
   elem.appendChild( vectorClassElem );
 }
 
@@ -116,6 +117,7 @@ void QgsComposerSymbolV2Item::readXML( const QDomElement& itemElem, bool xServer
   }
 
   setText( itemElem.attribute( "text", "" ) );
+  setUserText( itemElem.attribute( "userText", "" ) );
   QDomElement symbolsElem = itemElem.firstChildElement( "symbols" );
   if ( !symbolsElem.isNull() )
   {
@@ -174,6 +176,7 @@ void QgsComposerRasterSymbolItem::writeXML( QDomElement& elem, QDomDocument& doc
   QDomElement rasterClassElem = doc.createElement( "RasterClassificationItem" );
   rasterClassElem.setAttribute( "layerId", mLayerID );
   rasterClassElem.setAttribute( "text", text() );
+  rasterClassElem.setAttribute( "userText", userText() );
   rasterClassElem.setAttribute( "color", mColor.name() );
   elem.appendChild( rasterClassElem );
 }
@@ -185,6 +188,7 @@ void QgsComposerRasterSymbolItem::readXML( const QDomElement& itemElem, bool xSe
     return;
   }
   setText( itemElem.attribute( "text", "" ) );
+  setUserText( itemElem.attribute( "userText", "" ) );
   setLayerID( itemElem.attribute( "layerId", "" ) );
   setColor( QColor( itemElem.attribute( "color" ) ) );
 
@@ -225,6 +229,7 @@ void QgsComposerLayerItem::writeXML( QDomElement& elem, QDomDocument& doc ) cons
   QDomElement layerItemElem = doc.createElement( "LayerItem" );
   layerItemElem.setAttribute( "layerId", mLayerID );
   layerItemElem.setAttribute( "text", text() );
+  layerItemElem.setAttribute( "userText", userText() );
   layerItemElem.setAttribute( "showFeatureCount", showFeatureCount() );
   layerItemElem.setAttribute( "style", QgsComposerLegendStyle::styleName( mStyle ) );
   writeXMLChildren( layerItemElem, doc );
@@ -238,6 +243,7 @@ void QgsComposerLayerItem::readXML( const QDomElement& itemElem, bool xServerAva
     return;
   }
   setText( itemElem.attribute( "text", "" ) );
+  setUserText( itemElem.attribute( "userText", "" ) );
   setLayerID( itemElem.attribute( "layerId", "" ) );
   setShowFeatureCount( itemElem.attribute( "showFeatureCount", "" ) == "1" ? true : false );
   setStyle( QgsComposerLegendStyle::styleFromName( itemElem.attribute( "style", "subgroup" ) ) );
@@ -327,7 +333,9 @@ QStandardItem* QgsComposerGroupItem::clone() const
 void QgsComposerGroupItem::writeXML( QDomElement& elem, QDomDocument& doc ) const
 {
   QDomElement layerGroupElem = doc.createElement( "GroupItem" );
+  // text is always user text, but for forward compatibility for now write both
   layerGroupElem.setAttribute( "text", text() );
+  layerGroupElem.setAttribute( "userText", userText() );
   layerGroupElem.setAttribute( "style", QgsComposerLegendStyle::styleName( mStyle ) );
   writeXMLChildren( layerGroupElem, doc );
   elem.appendChild( layerGroupElem );
@@ -339,7 +347,14 @@ void QgsComposerGroupItem::readXML( const QDomElement& itemElem, bool xServerAva
   {
     return;
   }
-  setText( itemElem.attribute( "text", "" ) );
+  // text is always user text but for backward compatibility we read also text
+  QString userText = itemElem.attribute( "userText", "" );
+  if ( userText.isEmpty() )
+  {
+    userText = itemElem.attribute( "text", "" );
+  }
+  setText( userText );
+  setUserText( userText );
 
   setStyle( QgsComposerLegendStyle::styleFromName( itemElem.attribute( "style", "group" ) ) );
 
diff --git a/src/core/composer/qgscomposerlegenditem.h b/src/core/composer/qgscomposerlegenditem.h
index ce3b9c6314a7..2b29db782e11 100644
--- a/src/core/composer/qgscomposerlegenditem.h
+++ b/src/core/composer/qgscomposerlegenditem.h
@@ -53,10 +53,19 @@ class CORE_EXPORT QgsComposerLegendItem: public QStandardItem
     QgsComposerLegendStyle::Style style() const { return mStyle; }
     void setStyle( QgsComposerLegendStyle::Style style ) { mStyle = style; }
 
+    // Get text defined by user
+    virtual QString userText() const { return mUserText; }
+    // Set text defined by user
+    virtual void  setUserText( const QString & text ) { mUserText = text; }
+
+
   protected:
     void writeXMLChildren( QDomElement& elem, QDomDocument& doc ) const;
 
     QgsComposerLegendStyle::Style mStyle;
+
+    // User defined text
+    QString mUserText;
 };
 
 
diff --git a/src/core/composer/qgslegendmodel.cpp b/src/core/composer/qgslegendmodel.cpp
index cdf0fbfcada6..cc51fd038fc7 100644
--- a/src/core/composer/qgslegendmodel.cpp
+++ b/src/core/composer/qgslegendmodel.cpp
@@ -121,6 +121,7 @@ QStandardItem* QgsLegendModel::addGroup( QString text, int position )
     text = tr( "Group" );
 
   QgsComposerGroupItem* groupItem = new QgsComposerGroupItem( text );
+  groupItem->setUserText( text );
 
   if ( position == -1 )
   {
@@ -159,19 +160,18 @@ int QgsLegendModel::addVectorLayerItemsV2( QStandardItem* layerItem, QgsVectorLa
 
   QgsLegendSymbolList lst = renderer->legendSymbolItems();
   QgsLegendSymbolList::const_iterator symbolIt = lst.constBegin();
+  int row = 0;
   for ( ; symbolIt != lst.constEnd(); ++symbolIt )
   {
-    QString label = symbolIt->first;
-    if ( lItem->showFeatureCount() )
+    QgsComposerSymbolV2Item* currentSymbolItem = new QgsComposerSymbolV2Item( "" );
+
+    // Get userText from old item if exists
+    QgsComposerSymbolV2Item* oldSymbolItem = dynamic_cast<QgsComposerSymbolV2Item*>( layerItem->child( row, 0 ) );
+    if ( oldSymbolItem )
     {
-      // Add counts to multi symbols layers only or labeled single symbols,
-      // so that single symbol layers are still drawn on single line
-      if ( lst.size() > 1 || !label.isEmpty() )
-      {
-        label += QString( " [%1]" ).arg( vlayer->featureCount( symbolIt->second ) );
-      }
+      currentSymbolItem->setUserText( oldSymbolItem->userText() );
     }
-    QgsComposerSymbolV2Item* currentSymbolItem = new QgsComposerSymbolV2Item( label );
+
     currentSymbolItem->setFlags( Qt::ItemIsEnabled | Qt::ItemIsSelectable );
     if ( symbolIt->second )
     {
@@ -181,14 +181,23 @@ int QgsLegendModel::addVectorLayerItemsV2( QStandardItem* layerItem, QgsVectorLa
       }
       currentSymbolItem->setSymbolV2( symbolIt->second->clone() );
     }
-    layerItem->setChild( layerItem->rowCount(), 0, currentSymbolItem );
+    layerItem->setChild( row, 0, currentSymbolItem );
+
+    // updateSymbolV2ItemText needs layer set
+    updateSymbolV2ItemText( currentSymbolItem );
+
+    row++;
+  }
+
+  // Delete following old items (if current number of items decreased)
+  for ( int i = layerItem->rowCount() - 1; i >= row; --i )
+  {
+    layerItem->removeRow( i );
   }
 
   return 0;
 }
 
-
-
 int QgsLegendModel::addRasterLayerItems( QStandardItem* layerItem, QgsMapLayer* rlayer )
 {
   if ( !layerItem || !rlayer )
@@ -204,9 +213,18 @@ int QgsLegendModel::addRasterLayerItems( QStandardItem* layerItem, QgsMapLayer*
 
   QList< QPair< QString, QColor > > rasterItemList = rasterLayer->legendSymbologyItems();
   QList< QPair< QString, QColor > >::const_iterator itemIt = rasterItemList.constBegin();
+  int row = 0;
   for ( ; itemIt != rasterItemList.constEnd(); ++itemIt )
   {
     QgsComposerRasterSymbolItem* currentSymbolItem = new QgsComposerRasterSymbolItem( itemIt->first );
+
+    QgsComposerRasterSymbolItem* oldSymbolItem = dynamic_cast<QgsComposerRasterSymbolItem*>( layerItem->child( row, 0 ) );
+    if ( oldSymbolItem )
+    {
+      currentSymbolItem->setUserText( oldSymbolItem->userText() );
+      currentSymbolItem->setText( currentSymbolItem->userText() );
+    }
+
     if ( mHasTopLevelWindow )
     {
       QPixmap itemPixmap( 20, 20 );
@@ -217,11 +235,76 @@ int QgsLegendModel::addRasterLayerItems( QStandardItem* layerItem, QgsMapLayer*
     currentSymbolItem->setColor( itemIt->second );
     int currentRowCount = layerItem->rowCount();
     layerItem->setChild( currentRowCount, 0, currentSymbolItem );
+    row++;
+  }
+
+  // Delete following old items (if current number of items decreased)
+  for ( int i = layerItem->rowCount() - 1; i >= row; --i )
+  {
+    layerItem->removeRow( i );
   }
 
   return 0;
 }
 
+void QgsLegendModel::updateSymbolV2ItemText( QStandardItem* symbolItem )
+{
+  QgsComposerSymbolV2Item* sv2Item = dynamic_cast<QgsComposerSymbolV2Item*>( symbolItem );
+  if ( !sv2Item ) return;
+
+  QgsComposerLayerItem* lItem = dynamic_cast<QgsComposerLayerItem*>( sv2Item->parent() );
+  if ( !lItem ) return;
+
+  QgsMapLayer* mapLayer = QgsMapLayerRegistry::instance()->mapLayer( lItem->layerID() );
+  if ( !mapLayer ) return;
+
+  QgsVectorLayer* vLayer = qobject_cast<QgsVectorLayer*>( mapLayer );
+  if ( !vLayer ) return;
+
+  QgsFeatureRendererV2* renderer = vLayer->rendererV2();
+  if ( !renderer ) return;
+
+  if ( lItem->showFeatureCount() ) vLayer->countSymbolFeatures();
+
+  QgsLegendSymbolList symbolList = renderer->legendSymbolItems();
+
+  QPair<QString, QgsSymbolV2*> symbol = symbolList.value( symbolItem->row() );
+
+  QString label = sv2Item->userText().isEmpty() ? symbol.first : sv2Item->userText();
+
+  if ( lItem->showFeatureCount() )
+  {
+    // Add counts to multi symbols layers only or labeled single symbols,
+    // so that single symbol layers are still drawn on single line
+    if ( symbolList.size() > 1 || !label.isEmpty() )
+    {
+      label += QString( " [%1]" ).arg( vLayer->featureCount( symbol.second ) );
+    }
+  }
+  symbolItem->setText( label );
+}
+
+void QgsLegendModel::updateRasterSymbolItemText( QStandardItem* symbolItem )
+{
+  QgsComposerRasterSymbolItem* rItem = dynamic_cast<QgsComposerRasterSymbolItem*>( symbolItem );
+  if ( !rItem ) return;
+
+  QgsComposerLayerItem* lItem = dynamic_cast<QgsComposerLayerItem*>( rItem->parent() );
+  if ( !lItem ) return;
+
+  QgsMapLayer* mapLayer = QgsMapLayerRegistry::instance()->mapLayer( lItem->layerID() );
+  if ( !mapLayer ) return;
+
+  QgsRasterLayer* rLayer = qobject_cast<QgsRasterLayer*>( mapLayer );
+  if ( !rLayer ) return;
+
+  QPair< QString, QColor> symbol = rLayer->legendSymbologyItems().value( symbolItem->row() );
+
+  QString label = rItem->userText().isEmpty() ? symbol.first : rItem->userText();
+
+  symbolItem->setText( label );
+}
+
 void QgsLegendModel::updateItem( QStandardItem* item )
 {
   if ( !item )
@@ -243,6 +326,45 @@ void QgsLegendModel::updateItem( QStandardItem* item )
   }
 }
 
+void QgsLegendModel::updateItemText( QStandardItem* item )
+{
+  if ( !item )
+  {
+    return;
+  }
+
+  //only layer items are supported for update
+  QgsComposerLegendItem* cItem = dynamic_cast<QgsComposerLegendItem*>( item );
+  if ( ! cItem )
+  {
+    return;
+  }
+
+  QgsComposerLayerItem* lItem = dynamic_cast<QgsComposerLayerItem*>( cItem );
+  if ( lItem )
+  {
+    updateLayerItemText( lItem );
+    return;
+  }
+
+  QgsComposerSymbolV2Item* sv2Item = dynamic_cast<QgsComposerSymbolV2Item*>( cItem );
+  if ( sv2Item )
+  {
+    updateSymbolV2ItemText( sv2Item );
+    return;
+  }
+
+  QgsComposerRasterSymbolItem* rItem = dynamic_cast<QgsComposerRasterSymbolItem*>( cItem );
+  if ( rItem )
+  {
+    updateRasterSymbolItemText( rItem );
+    return;
+  }
+
+  // group
+  cItem->setText( cItem->userText() );
+}
+
 void QgsLegendModel::updateLayer( QStandardItem* layerItem )
 {
   QgsDebugMsg( "Entered." );
@@ -252,22 +374,9 @@ void QgsLegendModel::updateLayer( QStandardItem* layerItem )
     QgsMapLayer* mapLayer = QgsMapLayerRegistry::instance()->mapLayer( lItem->layerID() );
     if ( mapLayer )
     {
-      //delete all the entries under layer item
-      int currentRowCount = lItem->rowCount();
-      for ( int i = currentRowCount - 1; i >= 0; --i )
-      {
-        lItem->removeRow( i );
-      }
-
       QgsVectorLayer* vLayer = qobject_cast<QgsVectorLayer*>( mapLayer );
 
-      //set layer name as item text
-      QString label = mapLayer->name();
-      if ( vLayer && lItem->showFeatureCount() )
-      {
-        label += QString( " [%1]" ).arg( vLayer->featureCount() );
-      }
-      layerItem->setText( label );
+      updateLayerItemText( lItem );
 
       if ( vLayer )
       {
@@ -283,6 +392,26 @@ void QgsLegendModel::updateLayer( QStandardItem* layerItem )
   }
 }
 
+void QgsLegendModel::updateLayerItemText( QStandardItem* layerItem )
+{
+  QgsComposerLayerItem* lItem = dynamic_cast<QgsComposerLayerItem*>( layerItem );
+  if ( !lItem ) return;
+
+  QgsMapLayer* mapLayer = QgsMapLayerRegistry::instance()->mapLayer( lItem->layerID() );
+  if ( !mapLayer ) return;
+
+  QgsVectorLayer* vLayer = qobject_cast<QgsVectorLayer*>( mapLayer );
+  if ( !vLayer ) return;
+
+  QString label = lItem->userText().isEmpty() ? mapLayer->name() : lItem->userText();
+
+  if ( vLayer && lItem->showFeatureCount() )
+  {
+    label += QString( " [%1]" ).arg( vLayer->featureCount() );
+  }
+  lItem->setText( label );
+}
+
 void QgsLegendModel::removeLayer( const QString& layerId )
 {
   int numRootItems = rowCount();
diff --git a/src/core/composer/qgslegendmodel.h b/src/core/composer/qgslegendmodel.h
index 7f400a844b23..d13dbcf007ee 100644
--- a/src/core/composer/qgslegendmodel.h
+++ b/src/core/composer/qgslegendmodel.h
@@ -72,6 +72,10 @@ class CORE_EXPORT QgsLegendModel: public QStandardItemModel
     void updateRasterClassificationItem( QStandardItem* classificationItem )
     { Q_UNUSED( classificationItem ); }
 
+    /** Update single item text using item userText and other properties like showFeatureCount */
+    void updateItemText( QStandardItem* item );
+
+
     bool writeXML( QDomElement& composerLegendElem, QDomDocument& doc ) const;
     bool readXML( const QDomElement& legendModelElem, const QDomDocument& doc );
 
@@ -106,6 +110,11 @@ class CORE_EXPORT QgsLegendModel: public QStandardItemModel
      @return 0 in case of success*/
     int addRasterLayerItems( QStandardItem* layerItem, QgsMapLayer* rlayer );
 
+    void updateLayerItemText( QStandardItem* layerItem );
+    void updateSymbolV2ItemText( QStandardItem* symbolItem );
+    void updateRasterSymbolItemText( QStandardItem* symbolItem );
+
+
   protected:
     QStringList mLayerIds;
     /**True if this application has toplevel windows (normally true). If this is false, this means that the application
diff --git a/src/ui/qgscomposerlegendwidgetbase.ui b/src/ui/qgscomposerlegendwidgetbase.ui
index f143837d6252..db3ad807fcc9 100644
--- a/src/ui/qgscomposerlegendwidgetbase.ui
+++ b/src/ui/qgscomposerlegendwidgetbase.ui
@@ -54,7 +54,7 @@
       <property name="geometry">
        <rect>
         <x>0</x>
-        <y>-118</y>
+        <y>0</y>
         <width>369</width>
         <height>1088</height>
        </rect>
@@ -141,17 +141,13 @@
          <layout class="QVBoxLayout" name="verticalLayout_2">
           <item>
            <layout class="QHBoxLayout" name="horizontalLayout">
-            <item>
-             <widget class="QToolButton" name="mAddGroupButton">
-              <property name="text">
-               <string>Add group</string>
-              </property>
-             </widget>
-            </item>
             <item>
              <widget class="QToolButton" name="mUpdatePushButton">
+              <property name="toolTip">
+               <string>Update legend. User defined labels are preserved.</string>
+              </property>
               <property name="text">
-               <string>Update</string>
+               <string>Update item</string>
               </property>
               <property name="iconSize">
                <size>
@@ -163,8 +159,11 @@
             </item>
             <item>
              <widget class="QToolButton" name="mUpdateAllPushButton">
+              <property name="toolTip">
+               <string>Update whole legend. Layers are added/removed according to main application legend. User defined labels will be deleted.</string>
+              </property>
               <property name="text">
-               <string>All</string>
+               <string>Update all</string>
               </property>
              </widget>
             </item>
@@ -247,6 +246,20 @@
               </property>
              </widget>
             </item>
+            <item>
+             <widget class="QToolButton" name="mAddGroupToolButton">
+              <property name="toolTip">
+               <string>Add group</string>
+              </property>
+              <property name="text">
+               <string>...</string>
+              </property>
+              <property name="icon">
+               <iconset resource="../../images/images.qrc">
+                <normaloff>:/images/themes/default/mActionAddGroup.png</normaloff>:/images/themes/default/mActionAddGroup.png</iconset>
+              </property>
+             </widget>
+            </item>
             <item>
              <widget class="QToolButton" name="mAddToolButton">
               <property name="text">