Index: pyyaml/trunk/lib/yaml/emitter.py
===================================================================
--- pyyaml/trunk/lib/yaml/emitter.py	(revision 197)
+++ pyyaml/trunk/lib/yaml/emitter.py	(revision 218)
@@ -493,5 +493,6 @@
                 return ''
         if self.event.style and self.event.style in '|>':
-            if not self.flow_level and self.analysis.allow_block:
+            if (not self.flow_level and not self.simple_key_context
+                    and self.analysis.allow_block):
                 return self.event.style
         if not self.event.style or self.event.style == '\'':
@@ -671,5 +672,5 @@
             if index == 0:
                 # Leading indicators are special characters.
-                if ch in u'#,[]{}#&*!|>\'\"%@`': 
+                if ch in u'#,[]{}&*!|>\'\"%@`': 
                     flow_indicators = True
                     block_indicators = True