AucTeX: TeX-master in verbatim environment

[duinhir.imf.au.dk:0]

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In GNU Emacs 21.2.1 (i686-pc-linux-gnu, X toolkit, Xaw3d scroll bars)
 of 2003-01-02 on radagast
configured using `configure  --prefix=/home/daleif/bin/emacs-21.2'
Important settings:
  value of $LC_ALL: nil
  value of $LC_COLLATE: nil
  value of $LC_CTYPE: nil
  value of $LC_MESSAGES: nil
  value of $LC_MONETARY: nil
  value of $LC_NUMERIC: nil
  value of $LC_TIME: nil
  value of $LANG: en_US
  locale-coding-system: iso-latin-1
  default-enable-multibyte-characters: t

Please describe exactly what actions triggered the bug
and the precise symptoms of the bug:

I'm using AucTeX 11.13.

If one has the following code in a LaTeX file, presses C-c C-n
(by accident) then Emacs actually think that by C-c C-c RET it should
run latex on a (non-existent) masterfile named master-name-tex.

\begin{verbatim}
%%% Local Variables: 
%%% mode: latex
%%% TeX-master: "master-name"
\end{verbatim}

Isn't there any rule on where to place the lines 

%%% Local Variables: 
%%% mode: latex
%%% TeX-master: "master-name"
??

/Lars Madsen (aka daleif)





Recent input:
<mouse-movement> <mouse-1> C-x 1 <menu-bar> <Command> 
<Command on> <Buffer> C-c C-c C-g C-c C-n C-c C-c <return> 
C-u C-c C-n C-c C-c <return> C-c ` <down-mouse-1> <mouse-movement> 
<mouse-1> C-x 1 <menu-bar> <Command> <Command on> <Master 
File> C-c C-c <return> C-x C-w <backspace> <backspace> 
<backspace> <backspace> <backspace> <backspace> <backspace> 
<backspace> <backspace> <backspace> <backspace> <backspace> 
<backspace> <backspace> <backspace> <backspace> <backspace> 
t m p / h e s t . t e x <return> C-c C-c l a t e x 
<return> M-x a u c <tab> <backspace> <backspace> <backspace> 
b u <tab> <backspace> <backspace> r e <tab> p <tab> 
o <tab> r t <tab> <return>

Recent messages:
Next command will be on the master file
Type `C-c C-l' to display results of compilation.
LaTeX errors in `*~/work/Sekr-kursus/master-name output*'. Use C-c ` to display.
Wrote /home/daleif/tmp/hest.tex
Type `C-c C-l' to display results of compilation.
LaTeX errors in `*~/tmp/master-name output*'. Use C-c ` to display.
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