diff --git a/src/calibre/ebooks/txt/output.py b/src/calibre/ebooks/txt/output.py
index 261ace2f91..d9c42eb1dc 100644
--- a/src/calibre/ebooks/txt/output.py
+++ b/src/calibre/ebooks/txt/output.py
@@ -66,6 +66,13 @@ class TXTOutput(OutputFormatPlugin):
             help=_('Do not remove image references within the document. This is only ' \
             'useful when paired with a txt-output-formatting option that '
             'is not none because links are always removed with plain text output.')),
+        OptionRecommendation(name='keep_color',
+            recommended_value=False, level=OptionRecommendation.LOW,
+            help=_('Do not remove font color from output. This is only useful when ' \
+                   'txt-output-formatting is set to textile. Textile is the only ' \
+                   'formatting that supports setting font color. If this option is ' \
+                   'not specified font color will not be set and default to the ' \
+                   'color displayed by the reader (generally this is black).')),
      ])
 
     def convert(self, oeb_book, output_path, input_plugin, opts, log):
@@ -111,9 +118,12 @@ class TXTZOutput(TXTOutput):
         from calibre.ebooks.oeb.base import OEB_IMAGES
         with TemporaryDirectory('_txtz_output') as tdir:
             # TXT
-            with TemporaryFile('index.txt') as tf:
+            txt_name = 'index.txt'
+            if opts.txt_output_formatting.lower() == 'textile':
+                txt_name = 'index.text'
+            with TemporaryFile(txt_name) as tf:
                 TXTOutput.convert(self, oeb_book, tf, input_plugin, opts, log)
-                shutil.copy(tf, os.path.join(tdir, 'index.txt'))
+                shutil.copy(tf, os.path.join(tdir, txt_name))
 
             # Images
             for item in oeb_book.manifest:
diff --git a/src/calibre/ebooks/txt/textileml.py b/src/calibre/ebooks/txt/textileml.py
index 622ff8d2e3..1c35670596 100644
--- a/src/calibre/ebooks/txt/textileml.py
+++ b/src/calibre/ebooks/txt/textileml.py
@@ -98,7 +98,7 @@ class TextileMLizer(OEB2HTML):
         text = re.sub(u'%\n(p[<>=]{1,2}\.)', r'%\n\n\1', text)
         text = re.sub(u'p[<>=]{1,2}\.\n\n?', r'', text)
         text = re.sub(r'\n(p.*\.\n)(p.*\.)', r'\n\2', text)
-        text = re.sub(u'\np.*\.\xa0',   r'\np. ', text)                # blank paragraph
+        text = re.sub(r'(^|\n)p\.\n', r'\1p. \n', text)                # blank paragraph
         text = re.sub(u'\n\xa0',   r'\np. ', text)                     # blank paragraph
         text = re.sub(r' {2,}\|', r' |', text)                               #sort out spaces in tables
         # Now put back spaces removed earlier as they're needed here
@@ -176,6 +176,11 @@ class TextileMLizer(OEB2HTML):
         txt += self.check_styles(style)
         return txt
 
+    def prepare_string_for_textile(self, txt):
+        if re.search(r'(\s([*&_+\-=~@%|]|\?{2}))|(([*&_+\-=~@%|]|\?{2})\s)', txt):
+            return ' ==%s== ' % txt
+        return txt
+
     def dump_text(self, elem, stylizer):
         '''
         @elem: The element in the etree that we are working on.
@@ -197,7 +202,7 @@ class TextileMLizer(OEB2HTML):
         tags = []
         tag = barename(elem.tag)
         attribs = elem.attrib
-        
+
         # Ignore anything that is set to not be displayed.
         if style['display'] in ('none', 'oeb-page-head', 'oeb-page-foot') \
            or style['visibility'] == 'hidden':
@@ -209,15 +214,9 @@ class TextileMLizer(OEB2HTML):
         if tag in ('h1', 'h2', 'h3', 'h4', 'h5', 'h6', 'p', 'div'):
             if tag == 'div':
                 tag = 'p'
-            block = self.build_block(tag, style, attribs)
-            # Normal paragraph with no styling.
-            if block == '\np':
-                text.append('\n\n')
-                tags.append('\n')
-            else:
-                text.append(block)
-                text.append('. ')
-                tags.append('\n')
+            text.append(self.build_block(tag, style, attribs))
+            text.append('. ')
+            tags.append('\n')
             #self.style_embed = []
 
         if style['font-style'] == 'italic' or tag in ('i', 'em'):
@@ -393,7 +392,7 @@ class TextileMLizer(OEB2HTML):
         if hasattr(elem, 'text') and elem.text:
             txt = elem.text
             if not self.in_pre:
-                txt = self.remove_newlines(txt)
+                txt = self.prepare_string_for_textile(self.remove_newlines(txt))
             text.append(txt)
             self.id_no_text = u''
 
@@ -439,7 +438,7 @@ class TextileMLizer(OEB2HTML):
         if hasattr(elem, 'tail') and elem.tail:
             tail = elem.tail
             if not self.in_pre:
-                tail = self.remove_newlines(tail)
+                tail = self.prepare_string_for_textile(self.remove_newlines(tail))
             text.append(tail)
 
         return text