Index: wp-includes/default-filters.php
===================================================================
--- wp-includes/default-filters.php	(revision 19536)
+++ wp-includes/default-filters.php	(working copy)
@@ -194,6 +194,7 @@
 add_filter( 'pings_open',               '_close_comments_for_old_post', 10, 2 );
 add_filter( 'editable_slug',            'urldecode'                           );
 add_filter( 'nav_menu_meta_box_object', '_wp_nav_menu_meta_box_object'        );
+add_filter( 'widget_text',              'wpautop'                             ); // dependent on the widget setting
 add_filter( 'widget_text',              'shortcode_unautop'                   );
 add_filter( 'widget_text',              'do_shortcode'                        );
 
Index: wp-includes/default-widgets.php
===================================================================
--- wp-includes/default-widgets.php	(revision 19536)
+++ wp-includes/default-widgets.php	(working copy)
@@ -374,12 +374,20 @@
 	}
 
 	function widget( $args, $instance ) {
-		extract($args);
+		extract( $args );
 		$title = apply_filters( 'widget_title', empty( $instance['title'] ) ? '' : $instance['title'], $instance, $this->id_base );
+		if ( empty( $instance['filter'] ) ) {
+			remove_filter( 'widget_text', 'wpautop' );
+			remove_filter( 'widget_text', 'shortcode_unautop' );
+		}
 		$text = apply_filters( 'widget_text', empty( $instance['text'] ) ? '' : $instance['text'], $instance );
+		if ( empty( $instance['filter'] ) ) {
+			add_filter( 'widget_text', 'wpautop' );
+			add_filter( 'widget_text', 'shortcode_unautop' );
+		}
 		echo $before_widget;
-		if ( !empty( $title ) ) { echo $before_title . $title . $after_title; } ?>
-			<div class="textwidget"><?php echo !empty( $instance['filter'] ) ? wpautop( $text ) : $text; ?></div>
+		if ( ! empty( $title ) ) { echo $before_title . $title . $after_title; } ?>
+			<div class="textwidget"><?php echo $text; ?></div>
 		<?php
 		echo $after_widget;
 	}