diff --git a/src/calibre/ebooks/oeb/transforms/structure.py b/src/calibre/ebooks/oeb/transforms/structure.py
index 0db9b153df..fc338da692 100644
--- a/src/calibre/ebooks/oeb/transforms/structure.py
+++ b/src/calibre/ebooks/oeb/transforms/structure.py
@@ -13,6 +13,7 @@ from urlparse import urlparse
 
 from calibre.ebooks.oeb.base import XPNSMAP, TOC, XHTML, xml2text
 from calibre.ebooks import ConversionError
+from calibre.utils.ordered_dict import OrderedDict
 
 def XPath(x):
     try:
@@ -95,10 +96,8 @@ class DetectStructure(object):
                     self.log.exception('Failed to mark chapter')
 
     def create_level_based_toc(self):
-        if self.opts.level1_toc is None:
-            return
-        for item in self.oeb.spine:
-            self.add_leveled_toc_items(item)
+        if self.opts.level1_toc is not None:
+            self.add_leveled_toc_items()
 
     def create_toc_from_chapters(self):
         counter = self.oeb.toc.next_play_order()
@@ -145,49 +144,57 @@ class DetectStructure(object):
         return text, href
 
 
-    def add_leveled_toc_items(self, item):
-        level1 = XPath(self.opts.level1_toc)(item.data)
-        level1_order = []
-        document = item
-
+    def add_leveled_toc_items(self):
+        added = OrderedDict()
+        added2 = OrderedDict()
         counter = 1
-        if level1:
-            added = {}
-            for elem in level1:
+        for document in self.oeb.spine:
+            previous_level1 = list(added.itervalues())[-1] if added else None
+            previous_level2 = list(added2.itervalues())[-1] if added2 else None
+
+            for elem in XPath(self.opts.level1_toc)(document.data):
                 text, _href = self.elem_to_link(document, elem, counter)
                 counter += 1
                 if text:
                     node = self.oeb.toc.add(text, _href,
                             play_order=self.oeb.toc.next_play_order())
-                    level1_order.append(node)
                     added[elem] = node
                     #node.add(_('Top'), _href)
-            if self.opts.level2_toc is not None:
-                added2 = {}
-                level2 = list(XPath(self.opts.level2_toc)(document.data))
-                for elem in level2:
+
+            if self.opts.level2_toc is not None and added:
+                for elem in XPath(self.opts.level2_toc)(document.data):
                     level1 = None
                     for item in document.data.iterdescendants():
-                        if item in added.keys():
+                        if item in added:
                             level1 = added[item]
-                        elif item == elem and level1 is not None:
+                        elif item == elem:
+                            if level1 is None:
+                                if previous_level1 is None:
+                                    break
+                                level1 = previous_level1
                             text, _href = self.elem_to_link(document, elem, counter)
                             counter += 1
                             if text:
                                 added2[elem] = level1.add(text, _href,
                                     play_order=self.oeb.toc.next_play_order())
-                if self.opts.level3_toc is not None:
-                    level3 = list(XPath(self.opts.level3_toc)(document.data))
-                    for elem in level3:
+                            break
+
+                if self.opts.level3_toc is not None and added2:
+                    for elem in XPath(self.opts.level3_toc)(document.data):
                         level2 = None
                         for item in document.data.iterdescendants():
-                            if item in added2.keys():
+                            if item in added2:
                                 level2 = added2[item]
-                            elif item == elem and level2 is not None:
+                            elif item == elem:
+                                if level2 is None:
+                                    if previous_level2 is None:
+                                        break
+                                    level2 = previous_level2
                                 text, _href = \
                                         self.elem_to_link(document, elem, counter)
                                 counter += 1
                                 if text:
                                     level2.add(text, _href,
-                                    play_order=self.oeb.toc.next_play_order())
+                                        play_order=self.oeb.toc.next_play_order())
+                                break