diff --git a/source/graphics/Decal.cpp b/source/graphics/Decal.cpp
index 30e6fc5fb8..93132467ca 100644
--- a/source/graphics/Decal.cpp
+++ b/source/graphics/Decal.cpp
@@ -98,9 +98,11 @@ void CModelDecal::ValidatePosition()
 
 void CModelDecal::SetTransform(const CMatrix3D& transform)
 {
-	CMatrix3D newTransform = transform;
-	newTransform.SetYRotation(m_Decal.m_Angle);
-	newTransform.Concatenate(transform);
+	// Since decals are assumed to be horizontal and projected downwards
+	// onto the terrain, use just the Y-axis rotation and the translation
+	CMatrix3D newTransform;
+	newTransform.SetYRotation(transform.GetYRotation() + m_Decal.m_Angle);
+	newTransform.Translate(transform.GetTranslation());
 
 	CRenderableObject::SetTransform(newTransform);
 	InvalidatePosition();
diff --git a/source/maths/Matrix3D.cpp b/source/maths/Matrix3D.cpp
index dc4af5dede..eae659c6dd 100644
--- a/source/maths/Matrix3D.cpp
+++ b/source/maths/Matrix3D.cpp
@@ -503,3 +503,20 @@ void CMatrix3D::SetRotation(const CQuaternion& quat)
 {
 	quat.ToMatrix(*this);
 }
+
+float CMatrix3D::GetYRotation() const
+{
+	// Project the X axis vector onto the XZ plane
+	CVector3D axis = -GetLeft();
+	axis.Y = 0;
+
+	// Normalise projected vector
+
+	float len = axis.Length();
+	if (len < 0.0001f)
+		return 0.f;
+	axis *= 1.0f/len;
+
+	// Negate the return angle to match the SetYRotation convention
+	return -atan2(axis.Z, axis.X);
+}
diff --git a/source/maths/Matrix3D.h b/source/maths/Matrix3D.h
index 3d23262c7c..f4bd26bc0d 100644
--- a/source/maths/Matrix3D.h
+++ b/source/maths/Matrix3D.h
@@ -139,6 +139,9 @@ public:
 	CVector3D GetIn() const;
 	// return a quaternion representing the matrix's rotation
 	CQuaternion GetRotation() const;
+	// return the angle of rotation around the Y axis in range [-pi,pi]
+	// (based on projecting the X axis onto the XZ plane)
+	float GetYRotation() const;
 
 	// transform a 3D vector by this matrix
 	CVector3D Transform (const CVector3D &vector) const
diff --git a/source/maths/tests/test_Matrix3d.h b/source/maths/tests/test_Matrix3d.h
index f21fd37cd6..acca381185 100644
--- a/source/maths/tests/test_Matrix3d.h
+++ b/source/maths/tests/test_Matrix3d.h
@@ -122,6 +122,25 @@ public:
 				TS_ASSERT_DELTA(a(x,y), b(x,y), 0.0002f);
 	}
 
+	void test_getRotation()
+	{
+		CMatrix3D m;
+		srand(0);
+
+		m.SetZero();
+		TS_ASSERT_EQUALS(m.GetYRotation(), 0.f);
+
+		m.SetIdentity();
+		TS_ASSERT_EQUALS(m.GetYRotation(), 0.f);
+
+		for (int j = 0; j < 16; ++j)
+		{
+			float a = 2*M_PI*rand()/(float)RAND_MAX - M_PI;
+			m.SetYRotation(a);
+			TS_ASSERT_DELTA(m.GetYRotation(), a, 0.001f);
+		}
+	}
+
 	void test_scale()
 	{
 		CMatrix3D m;