Index: C:/java/maven-src/maven-scm/maven-scm-providers/maven-scm-provider-local/src/test/java/org/apache/maven/scm/provider/local/command/update/LocalUpdateCommandTckTest.java
===================================================================
--- C:/java/maven-src/maven-scm/maven-scm-providers/maven-scm-provider-local/src/test/java/org/apache/maven/scm/provider/local/command/update/LocalUpdateCommandTckTest.java	(revision 446890)
+++ C:/java/maven-src/maven-scm/maven-scm-providers/maven-scm-provider-local/src/test/java/org/apache/maven/scm/provider/local/command/update/LocalUpdateCommandTckTest.java	(working copy)
@@ -16,10 +16,27 @@
  * limitations under the License.
  */
 
+import java.io.File;
+import java.io.FileReader;
+import java.io.Reader;
+import java.util.Date;
+import java.util.Iterator;
+import java.util.List;
+import java.util.TreeSet;
+
+import org.apache.maven.scm.ChangeSet;
+import org.apache.maven.scm.ScmFile;
+import org.apache.maven.scm.ScmFileSet;
+import org.apache.maven.scm.ScmTestCase;
+import org.apache.maven.scm.command.update.UpdateScmResult;
+import org.apache.maven.scm.manager.ScmManager;
+import org.apache.maven.scm.providers.local.metadata.LocalScmMetadata;
+import org.apache.maven.scm.providers.local.metadata.io.xpp3.LocalScmMetadataXpp3Reader;
+import org.apache.maven.scm.repository.ScmRepository;
 import org.apache.maven.scm.tck.command.update.UpdateCommandTckTest;
+import org.codehaus.plexus.util.FileUtils;
+import org.codehaus.plexus.util.IOUtil;
 
-import java.io.File;
-
 /**
  * @author <a href="mailto:trygvis@inamo.no">Trygve Laugst&oslash;l</a>
  * @version $Id$
@@ -41,6 +58,96 @@
         makeRepo( getRepositoryRoot() );
     }
 
+    /**
+     * Tests that a file that has been deleted from repository after checkout will be removed by scm-local. Local
+     * additions must not be deleted.
+     */
+    public void testDeletion() throws Exception
+    {
+        FileUtils.deleteDirectory( getUpdatingCopy() );
+
+        ScmRepository repository = makeScmRepository( getScmUrl() );
+
+        checkOut( getUpdatingCopy(), repository );
+
+        // Check preconditions
+        File readmeFileLocal = new File( getUpdatingCopy(), "readme.txt" );
+        assertTrue( readmeFileLocal.exists() );
+        File newFileLocal = new File( getUpdatingCopy(), "newfile.xml" );
+        assertTrue( !newFileLocal.exists() );
+
+        // Delete readme.txt from repository
+        File readmeFileRepo = new File( getRepositoryRoot(), moduleName + "/readme.txt" );
+        assertTrue( readmeFileRepo.exists() );
+        assertTrue( "Could not delete", readmeFileRepo.delete() );
+        assertFalse( readmeFileRepo.exists() );
+
+        // Make local addition to updating copy - this one must not be touched
+        ScmTestCase.makeFile( getUpdatingCopy(), "newfile.xml", "added newfile.xml locally" );
+        assertTrue( newFileLocal.exists() );
+
+        // ----------------------------------------------------------------------
+        // Update the project
+        // ----------------------------------------------------------------------
+
+        ScmManager scmManager = getScmManager();
+        Date lastUpdate = new Date( System.currentTimeMillis() );
+        Thread.sleep( 1000 );
+        UpdateScmResult result =
+            scmManager.getProviderByUrl( getScmUrl() ).update( repository, new ScmFileSet( getUpdatingCopy() ), null,
+                                                               lastUpdate );
+
+        assertNotNull( "The command returned a null result.", result );
+
+        assertResultIsSuccess( result );
+
+        List updatedFiles = result.getUpdatedFiles();
+
+        assertEquals( "Expected 1 files in the updated files list " + updatedFiles, 1, updatedFiles.size() );
+
+        // ----------------------------------------------------------------------
+        // Assert the files in the updated files list
+        // ----------------------------------------------------------------------
+
+        Iterator files = new TreeSet( updatedFiles ).iterator();
+
+        // readme.txt
+        ScmFile file = (ScmFile) files.next();
+        assertPath( "/readme.txt", file.getPath() );
+        assertTrue( file.getStatus().isUpdate() );
+
+        // ----------------------------------------------------------------------
+        // Assert working directory contents
+        // ----------------------------------------------------------------------
+
+        // readme.txt
+        assertTrue( "Expected local copy of readme.txt to be deleted", !readmeFileLocal.exists() );
+
+        // newfile.xml
+        assertTrue( "Expected local copy of newfile.xml NOT to be deleted", newFileLocal.exists() );
+
+        // ----------------------------------------------------------------------
+        // Assert metadata file
+        // ----------------------------------------------------------------------
+        File metadataFile = new File( getUpdatingCopy(), ".maven-scm-local" );
+        assertTrue( "Expected metadata file .maven-scm-local does not exist", metadataFile.exists() );
+        Reader reader = new FileReader( metadataFile );
+        LocalScmMetadata metadata;
+        try
+        {
+            metadata = new LocalScmMetadataXpp3Reader().read( reader );
+        }
+        finally
+        {
+            IOUtil.close( reader );
+        }
+        File root = new File( getRepositoryRoot() + "/" + moduleName );
+        List fileNames = FileUtils.getFileNames( root, "**", null, false );
+        assertEquals( fileNames, metadata.getRepositoryFileNames() );
+
+    }
+
+    
     private void makeRepo( File workingDirectory )
         throws Exception
     {
Index: C:/java/maven-src/maven-scm/maven-scm-providers/maven-scm-provider-local/src/test/java/org/apache/maven/scm/provider/local/command/checkout/LocalCheckOutCommandTckTest.java
===================================================================
--- C:/java/maven-src/maven-scm/maven-scm-providers/maven-scm-provider-local/src/test/java/org/apache/maven/scm/provider/local/command/checkout/LocalCheckOutCommandTckTest.java	(revision 446890)
+++ C:/java/maven-src/maven-scm/maven-scm-providers/maven-scm-provider-local/src/test/java/org/apache/maven/scm/provider/local/command/checkout/LocalCheckOutCommandTckTest.java	(working copy)
@@ -16,10 +16,18 @@
  * limitations under the License.
  */
 
+import java.io.File;
+import java.io.FileReader;
+import java.io.Reader;
+import java.util.List;
+
+import org.apache.maven.scm.command.checkout.CheckOutScmResult;
+import org.apache.maven.scm.providers.local.metadata.LocalScmMetadata;
+import org.apache.maven.scm.providers.local.metadata.io.xpp3.LocalScmMetadataXpp3Reader;
 import org.apache.maven.scm.tck.command.checkout.CheckOutCommandTckTest;
+import org.codehaus.plexus.util.FileUtils;
+import org.codehaus.plexus.util.IOUtil;
 
-import java.io.File;
-
 /**
  * @author <a href="mailto:evenisse@apache.org">Emmanuel Venisse</a>
  * @version $Id$
@@ -50,4 +58,39 @@
 
         makeDirectory( root, "/src/test/resources" );
     }
+    
+    /**
+     * Tests that the metadata file .maven-scm-local is written correctly
+     */
+    public void testMetadata() throws Exception
+    {
+        FileUtils.deleteDirectory( getWorkingCopy() );
+
+        CheckOutScmResult result = checkOut( getWorkingCopy(), getScmRepository() );
+
+        assertResultIsSuccess( result );
+
+        List checkedOutFiles = result.getCheckedOutFiles();
+
+        assertEquals( 4, checkedOutFiles.size() );
+
+        // ----------------------------------------------------------------------
+        // Assert metadata file
+        // ----------------------------------------------------------------------
+        File metadataFile = new File( getWorkingCopy(), ".maven-scm-local" );
+        assertTrue( "Expected metadata file .maven-scm-local does not exist", metadataFile.exists() );
+        Reader reader = new FileReader( metadataFile );
+        LocalScmMetadata metadata;
+        try
+        {
+            metadata = new LocalScmMetadataXpp3Reader().read( reader );
+        }
+        finally
+        {
+            IOUtil.close( reader );
+        }
+        File root = new File( getRepositoryRoot() + "/" + module );
+        List fileNames = FileUtils.getFileNames( root, "**", null, false );
+        assertEquals( fileNames, metadata.getRepositoryFileNames() );
+    }
 }
Index: C:/java/maven-src/maven-scm/maven-scm-providers/maven-scm-provider-local/src/main/mdo/maven-scm-local-metadata.mdo
===================================================================
--- C:/java/maven-src/maven-scm/maven-scm-providers/maven-scm-provider-local/src/main/mdo/maven-scm-local-metadata.mdo	(revision 0)
+++ C:/java/maven-src/maven-scm/maven-scm-providers/maven-scm-provider-local/src/main/mdo/maven-scm-local-metadata.mdo	(revision 0)
@@ -0,0 +1,29 @@
+<model>
+  <id>maven-scm-local-metadata</id>
+  <name>LocalScmMetadata</name>
+  <description>Metadata for Maven SCM Local provider</description>
+  <defaults>
+    <default>
+      <key>package</key>
+      <value>org.apache.maven.scm.providers.local.metadata</value>
+    </default>
+  </defaults>
+
+  <classes>
+    <class rootElement="true" xml.tagName="localScmMetadata">
+      <name>LocalScmMetadata</name>
+      <version>1.0.0+</version>
+      <fields>
+        <field xml.listStyle="wrapped">
+          <name>repositoryFileNames</name>
+          <version>1.0.0+</version>
+          <association>
+             <type>String</type>
+             <multiplicity>*</multiplicity>
+          </association>
+          <description>The list of filenames contained in the repository during last checkout or update operation.</description>
+        </field>
+       </fields>
+    </class>
+  </classes>
+</model>
Index: C:/java/maven-src/maven-scm/maven-scm-providers/maven-scm-provider-local/src/main/java/org/apache/maven/scm/provider/local/metadata/LocalScmMetadataUtils.java
===================================================================
--- C:/java/maven-src/maven-scm/maven-scm-providers/maven-scm-provider-local/src/main/java/org/apache/maven/scm/provider/local/metadata/LocalScmMetadataUtils.java	(revision 0)
+++ C:/java/maven-src/maven-scm/maven-scm-providers/maven-scm-provider-local/src/main/java/org/apache/maven/scm/provider/local/metadata/LocalScmMetadataUtils.java	(revision 0)
@@ -0,0 +1,103 @@
+package org.apache.maven.scm.provider.local.metadata;
+
+import java.io.File;
+import java.io.FileReader;
+import java.io.FileWriter;
+import java.io.IOException;
+import java.io.Reader;
+import java.io.Writer;
+import java.util.List;
+
+import org.apache.maven.scm.log.ScmLogger;
+import org.apache.maven.scm.providers.local.metadata.LocalScmMetadata;
+import org.apache.maven.scm.providers.local.metadata.io.xpp3.LocalScmMetadataXpp3Reader;
+import org.apache.maven.scm.providers.local.metadata.io.xpp3.LocalScmMetadataXpp3Writer;
+import org.codehaus.plexus.util.FileUtils;
+import org.codehaus.plexus.util.IOUtil;
+import org.codehaus.plexus.util.xml.pull.XmlPullParserException;
+
+/**
+ * Utils for dealing with LocalScmMetadata
+ * 
+ * @author <a href="mailto:arne@degenring.de">Arne Degenring</a>
+ * @version $Id: $
+ */
+public class LocalScmMetadataUtils
+{
+    /** The name of the metadata file */
+    public static final String FILENMAE = ".maven-scm-local";
+
+    protected final ScmLogger logger;
+
+    public LocalScmMetadataUtils( ScmLogger logger )
+    {
+        this.logger = logger;
+    }
+
+    /**
+     * Builds LocalScmMetadata based on contents of repository
+     */
+    public LocalScmMetadata buildMetadata( File repository ) throws IOException
+    {
+        List repoFilenames = FileUtils.getFileNames( repository.getAbsoluteFile(), "**", null, false );
+        LocalScmMetadata metadata = new LocalScmMetadata();
+        metadata.setRepositoryFileNames( repoFilenames );
+        return metadata;
+    }
+
+    /**
+     * Writes metadata file
+     */
+    public void writeMetadata( File destinationDir, LocalScmMetadata metadata ) throws IOException
+    {
+        File metadataFile = new File( destinationDir, FILENMAE );
+        metadataFile.createNewFile();
+        Writer writer = new FileWriter( metadataFile );
+        try
+        {
+            new LocalScmMetadataXpp3Writer().write( writer, metadata );
+        }
+        finally
+        {
+            IOUtil.close( writer );
+        }
+    }
+
+    /**
+     * Reads metadata file from given directory.
+     * 
+     * @param dir
+     *            The directory that should contain the metadata file
+     * @return LocalScmMetadata or <tt>null</tt> in case of problems
+     */
+    public LocalScmMetadata readMetadata( File dir )
+    {
+        File metadataFile = new File( dir, FILENMAE );
+        if ( !metadataFile.exists() )
+        {
+            return null;
+        }
+        LocalScmMetadata result = null;
+        Reader reader = null;
+        try
+        {
+            reader = new FileReader( metadataFile );
+            result = new LocalScmMetadataXpp3Reader().read( reader );
+        }
+        catch ( XmlPullParserException e )
+        {
+            logger.warn( "Could not interpret .maven-scm-local - ignoring", e );
+            return null;
+        }
+        catch ( IOException e )
+        {
+            logger.warn( "Could not Read .maven-scm-local - ignoring", e );
+        }
+        finally
+        {
+            IOUtil.close( reader );
+        }
+        return result;
+    }
+
+}
Index: C:/java/maven-src/maven-scm/maven-scm-providers/maven-scm-provider-local/src/main/java/org/apache/maven/scm/provider/local/command/update/LocalUpdateCommand.java
===================================================================
--- C:/java/maven-src/maven-scm/maven-scm-providers/maven-scm-provider-local/src/main/java/org/apache/maven/scm/provider/local/command/update/LocalUpdateCommand.java	(revision 446890)
+++ C:/java/maven-src/maven-scm/maven-scm-providers/maven-scm-provider-local/src/main/java/org/apache/maven/scm/provider/local/command/update/LocalUpdateCommand.java	(working copy)
@@ -16,6 +16,12 @@
  * limitations under the License.
  */
 
+import java.io.File;
+import java.io.IOException;
+import java.util.ArrayList;
+import java.util.Iterator;
+import java.util.List;
+
 import org.apache.maven.scm.ScmException;
 import org.apache.maven.scm.ScmFile;
 import org.apache.maven.scm.ScmFileSet;
@@ -26,16 +32,12 @@
 import org.apache.maven.scm.provider.ScmProviderRepository;
 import org.apache.maven.scm.provider.local.command.LocalCommand;
 import org.apache.maven.scm.provider.local.command.changelog.LocalChangeLogCommand;
+import org.apache.maven.scm.provider.local.metadata.LocalScmMetadataUtils;
 import org.apache.maven.scm.provider.local.repository.LocalScmProviderRepository;
+import org.apache.maven.scm.providers.local.metadata.LocalScmMetadata;
 import org.codehaus.plexus.util.FileUtils;
 import org.codehaus.plexus.util.StringUtils;
 
-import java.io.File;
-import java.io.IOException;
-import java.util.ArrayList;
-import java.util.Iterator;
-import java.util.List;
-
 /**
  * @author <a href="mailto:trygvis@inamo.no">Trygve Laugst&oslash;l</a>
  * @version $Id$
@@ -94,6 +96,31 @@
             List fileList = FileUtils.getFiles( source.getAbsoluteFile(), "**", null );
 
             updatedFiles = update( source, baseDestination, fileList );
+
+            // process deletions in repository
+            LocalScmMetadataUtils metadataUtils = new LocalScmMetadataUtils( getLogger() );
+            LocalScmMetadata originalMetadata = metadataUtils.readMetadata( baseDestination );
+            if ( originalMetadata != null )
+            {
+                LocalScmMetadata newMetadata = metadataUtils.buildMetadata( source );
+                for ( Iterator it = originalMetadata.getRepositoryFileNames().iterator(); it.hasNext(); )
+                {
+                    String filename = (String) it.next();
+                    if ( !newMetadata.getRepositoryFileNames().contains( filename ) )
+                    {
+                        File localFile = new File( baseDestination, filename );
+                        if ( localFile.exists() )
+                        {
+                            localFile.delete();
+                            updatedFiles.add( new ScmFile( "/" + filename, ScmFileStatus.UPDATED ) );
+                        }
+                    }
+                }
+            }
+
+            // rewrite metadata file
+            metadataUtils.writeMetadata( baseDestination, metadataUtils.buildMetadata( source ) );
+            
         }
         catch ( IOException ex )
         {
Index: C:/java/maven-src/maven-scm/maven-scm-providers/maven-scm-provider-local/src/main/java/org/apache/maven/scm/provider/local/command/checkout/LocalCheckOutCommand.java
===================================================================
--- C:/java/maven-src/maven-scm/maven-scm-providers/maven-scm-provider-local/src/main/java/org/apache/maven/scm/provider/local/command/checkout/LocalCheckOutCommand.java	(revision 446890)
+++ C:/java/maven-src/maven-scm/maven-scm-providers/maven-scm-provider-local/src/main/java/org/apache/maven/scm/provider/local/command/checkout/LocalCheckOutCommand.java	(working copy)
@@ -16,6 +16,15 @@
  * limitations under the License.
  */
 
+import java.io.File;
+import java.io.FileWriter;
+import java.io.IOException;
+import java.io.Writer;
+import java.util.ArrayList;
+import java.util.Arrays;
+import java.util.Iterator;
+import java.util.List;
+
 import org.apache.maven.scm.ScmException;
 import org.apache.maven.scm.ScmFile;
 import org.apache.maven.scm.ScmFileSet;
@@ -24,17 +33,14 @@
 import org.apache.maven.scm.command.checkout.CheckOutScmResult;
 import org.apache.maven.scm.provider.ScmProviderRepository;
 import org.apache.maven.scm.provider.local.command.LocalCommand;
+import org.apache.maven.scm.provider.local.metadata.LocalScmMetadataUtils;
 import org.apache.maven.scm.provider.local.repository.LocalScmProviderRepository;
+import org.apache.maven.scm.providers.local.metadata.LocalScmMetadata;
+import org.apache.maven.scm.providers.local.metadata.io.xpp3.LocalScmMetadataXpp3Writer;
 import org.codehaus.plexus.util.FileUtils;
+import org.codehaus.plexus.util.IOUtil;
 import org.codehaus.plexus.util.StringUtils;
 
-import java.io.File;
-import java.io.IOException;
-import java.util.ArrayList;
-import java.util.Arrays;
-import java.util.Iterator;
-import java.util.List;
-
 /**
  * @author <a href="mailto:trygvis@inamo.no">Trygve Laugst&oslash;l</a>
  * @version $Id$
@@ -101,6 +107,10 @@
             }
 
             checkedOutFiles = checkOut( source, baseDestination, fileList, repository.getModule() );
+            
+            // write metadata file
+            LocalScmMetadataUtils metadataUtils = new LocalScmMetadataUtils( getLogger() );
+            metadataUtils.writeMetadata( baseDestination, metadataUtils.buildMetadata( source ) );
         }
         catch ( IOException ex )
         {
@@ -152,4 +162,6 @@
 
         return checkedOutFiles;
     }
+
+    
 }
Index: C:/java/maven-src/maven-scm/maven-scm-providers/maven-scm-provider-local/pom.xml
===================================================================
--- C:/java/maven-src/maven-scm/maven-scm-providers/maven-scm-provider-local/pom.xml	(revision 446890)
+++ C:/java/maven-src/maven-scm/maven-scm-providers/maven-scm-provider-local/pom.xml	(working copy)
@@ -8,4 +8,27 @@
   <artifactId>maven-scm-provider-local</artifactId>
   <name>Maven SCM Local Provider</name>
   <version>1.0-SNAPSHOT</version>
+  <build>
+    <plugins>
+      <plugin>
+        <groupId>org.codehaus.modello</groupId>
+        <artifactId>modello-maven-plugin</artifactId>
+        <version>1.0-alpha-6</version>
+        <executions>
+          <execution>
+            <goals>
+              <goal>java</goal>
+              <goal>xpp3-reader</goal>
+              <goal>xpp3-writer</goal>
+              <goal>xsd</goal>
+            </goals>
+          </execution>
+        </executions>
+        <configuration>
+          <version>1.0.0</version>
+          <model>src/main/mdo/maven-scm-local-metadata.mdo</model>
+        </configuration>
+      </plugin>
+    </plugins>
+  </build>
 </project>
\ No newline at end of file