diff --git a/doc/syncmercurial.mdtext b/doc/syncmercurial.mdtext
index 0d13de9..30149bd 100644
--- a/doc/syncmercurial.mdtext
+++ b/doc/syncmercurial.mdtext
@@ -67,6 +67,14 @@ You also need to provide the base definition of the hgrc file. For example:
                'extensions' => array(),
                                                   );
 
+If you are note using Apache but Nginx, you may need to create the
+passwords as plain text passwords (see ticket 391). You can configure
+the password storage with the format you want. The default is `sha`
+you can set it to `plain` for nginx.
+
+    $cfg['idf_plugin_syncmercurial_passwd_mode'] = 'sha';
+
+See the [`FILE_PASSWD_*` constants](http://euk1.php.net/package/File_Passwd/docs/latest/File_Passwd/_File_Passwd-1.1.7---Passwd.php.html) for more choices.
 
 ## Cron configuration
 
diff --git a/src/IDF/Plugin/SyncMercurial.php b/src/IDF/Plugin/SyncMercurial.php
index 1c37656..37a6c48 100644
--- a/src/IDF/Plugin/SyncMercurial.php
+++ b/src/IDF/Plugin/SyncMercurial.php
@@ -97,7 +97,8 @@ class IDF_Plugin_SyncMercurial
         }
         $ht = new File_Passwd_Authbasic($passwd_file);
         $ht->load();
-        $ht->setMode(FILE_PASSWD_SHA); 
+        $ht->setMode(Pluf::f('idf_plugin_syncmercurial_passwd_mode',
+                             FILE_PASSWD_SHA)); 
         if ($ht->userExists($user->login)) {
             $ht->changePasswd($user->login, $this->getMercurialPass($user));
         } else {
@@ -138,7 +139,8 @@ class IDF_Plugin_SyncMercurial
             throw new Exception (sprintf(__('%s does not exist or is not writable.'), $passwd_file));
         }
         $ht = new File_Passwd_Authbasic($passwd_file);
-        $ht->setMode(FILE_PASSWD_SHA); 
+        $ht->setMode(Pluf::f('idf_plugin_syncmercurial_passwd_mode',
+                             FILE_PASSWD_SHA)); 
         $ht->load();
         $mem = $project->getMembershipData();
         $members = array_merge((array)$mem['members'], (array)$mem['owners'],