diff --git a/lib/rexml/text.rb b/lib/rexml/text.rb
index b47bad3b..7e0befe9 100644
--- a/lib/rexml/text.rb
+++ b/lib/rexml/text.rb
@@ -151,25 +151,45 @@ def Text.check string, pattern, doctype
         end
       end
 
-      # context sensitive
-      string.scan(pattern) do
-        if $1[-1] != ?;
-          raise "Illegal character #{$1.inspect} in raw string #{string.inspect}"
-        elsif $1[0] == ?&
-          if $5 and $5[0] == ?#
-            case ($5[1] == ?x ? $5[2..-1].to_i(16) : $5[1..-1].to_i)
-            when *VALID_CHAR
+      pos = 0
+      while (index = string.index(/<|&/, pos))
+        if string[index] == "<"
+          raise "Illegal character \"#{string[index]}\" in raw string #{string.inspect}"
+        end
+
+        unless (end_index = string.index(/[^\s];/, index + 1))
+          raise "Illegal character \"#{string[index]}\" in raw string #{string.inspect}"
+        end
+
+        value = string[(index + 1)..end_index]
+        if /\s/.match?(value)
+          raise "Illegal character \"#{string[index]}\" in raw string #{string.inspect}"
+        end
+
+        if value[0] == "#"
+          character_reference = value[1..-1]
+
+          unless (/\A(\d+|x[0-9a-fA-F]+)\z/.match?(character_reference))
+            if character_reference[0] == "x" || character_reference[-1] == "x"
+              raise "Illegal character \"#{string[index]}\" in raw string #{string.inspect}"
             else
-              raise "Illegal character #{$1.inspect} in raw string #{string.inspect}"
+              raise "Illegal character #{string.inspect} in raw string #{string.inspect}"
             end
-          # FIXME: below can't work but this needs API change.
-          # elsif @parent and $3 and !SUBSTITUTES.include?($1)
-          #   if !doctype or !doctype.entities.has_key?($3)
-          #     raise "Undeclared entity '#{$1}' in raw string \"#{string}\""
-          #   end
           end
+
+          case (character_reference[0] == "x" ? character_reference[1..-1].to_i(16) : character_reference[0..-1].to_i)
+          when *VALID_CHAR
+          else
+            raise "Illegal character #{string.inspect} in raw string #{string.inspect}"
+          end
+        elsif !(/\A#{Entity::NAME}\z/um.match?(value))
+          raise "Illegal character \"#{string[index]}\" in raw string #{string.inspect}"
         end
+
+        pos = end_index + 1
       end
+
+      string
     end
 
     def node_type
diff --git a/test/parse/test_character_reference.rb b/test/parse/test_character_reference.rb
new file mode 100644
index 00000000..8ddeccaa
--- /dev/null
+++ b/test/parse/test_character_reference.rb
@@ -0,0 +1,17 @@
+require "test/unit"
+require "core_assertions"
+
+require "rexml/document"
+
+module REXMLTests
+  class TestParseCharacterReference < Test::Unit::TestCase
+    include Test::Unit::CoreAssertions
+
+    def test_gt_linear_performance_many_preceding_zeros
+      seq = [10000, 50000, 100000, 150000, 200000]
+      assert_linear_performance(seq, rehearsal: 10) do |n|
+        REXML::Document.new('<test testing="&#' + "0" * n + '97;"/>')
+      end
+    end
+  end
+end