diff --git a/src/extensionsIntegrated/Phoenix-live-preview/FILE_PROTOCOL_PREVIEW_NOTES.md b/src/extensionsIntegrated/Phoenix-live-preview/FILE_PROTOCOL_PREVIEW_NOTES.md
new file mode 100644
index 0000000000..5333796cc0
--- /dev/null
+++ b/src/extensionsIntegrated/Phoenix-live-preview/FILE_PROTOCOL_PREVIEW_NOTES.md
@@ -0,0 +1,577 @@
+# Static `file://` live preview for HTML files outside the project (not shipped yet)
+
+Status: **prototyped and verified on the Electron desktop shell on 2026-09-05, then rolled back**. Nothing
+in this document is live in the product. Keep it until the feature is picked up again; the full working
+patch for this repo is at the bottom, and the Electron main-process code is in the middle.
+
+## Problem
+
+Opening an HTML file that is not inside the current project shows the "Preview Unavailable!" page
+(`Strings.DESCRIPTION_LIVEDEV_PREVIEW_RESTRICTED*`, built in `NodeStaticServer._getExternalPreviewURL`).
+We deliberately refuse to serve such files over the live preview http server: a page served from a
+non-project location could walk the disk with relative URLs (`../../.aws/credentials`), read the content
+and post it to a remote server. Only project files are served, and only from the project root.
+
+The degraded but safe alternative is to show the file as a plain `file://` page (what a browser does when
+you double-click an html file) that reloads on save. No live edit transport, no instrumentation, no popout
+tab routing. This works only on the desktop app; the browser build has no local file access at all.
+
+## What we found (read this before re-implementing)
+
+1. **A plain `<iframe>` cannot load `file://` in the desktop app.** Chromium refuses a `file://`
+   navigation in a frame whose parent is not itself a `file://` page. The frame silently stays on
+   `about:blank`, no `load` event, no console error. Tested with and without the `sandbox` attribute.
+   `asset://localhost/...` and `phtauri://localhost/...` do not help either: the asset scope only covers
+   `$APPLOCALDATA/assets`, and `phtauri://` only serves the app bundle.
+2. **Tauri is out of scope.** WebKitGTK / WKWebView / WebView2 have the same iframe restriction and no
+   `<webview>` element. A top-level Tauri `WebviewWindow` with a `file://` url does open, but that is a
+   separate window, not the in-panel preview the UX needs. Tauri is being deprecated in favour of Electron,
+   so the prototype targeted Electron only. Non-Electron builds keep the "Preview Unavailable!" page.
+3. **Electron `<webview>` is the in-panel answer.** A `<webview src="file:///...">` guest loads the page
+   fine from the `phtauri://localhost` app origin. It needs `webPreferences.webviewTag: true` on the hosting
+   `BrowserWindow`, and `will-attach-webview` hardening in the main process. `webview.reload()` reloads in
+   place (scroll position retained); `webview.getURL()`, `getTitle()`, `executeJavaScript()` all work.
+   The element must be styled `display: inline-flex; width: 100%; height: 100%` (the `width`/`height`
+   attributes used by the iframe are ignored by `<webview>`).
+4. **Electron `file://` pages are NOT sandboxed like Chrome's, and this is the crucial part.** In the first
+   working build the previewed page could do all of the following, which is exactly the secret-exfiltration
+   scenario that motivated the restriction in the first place:
+   - `fetch("file:///etc/hostname")` returned the file content (Chrome blocks this).
+   - `<iframe src="file:///.../secret.txt">` + `contentDocument.body.innerText` read the file
+     (Electron grants "file access from file urls", so all `file://` documents are same-origin).
+   - `fetch("http://example.com/")` succeeded without CORS ("universal access from file urls").
+   - `fetch("phtauri://localhost/src/index.html")` reached the app's own scheme.
+   There is no documented `webPreferences` flag to turn these off per guest. The fix that worked is a
+   request filter on the guest's session (`session.fromPartition(...).webRequest.onBeforeRequest`), which
+   does intercept `file://` requests in Electron. Policy that passed all probes while the Bootstrap
+   "sign-in" example page still rendered with its css/js/images:
+   - `file://` allowed only for `resourceType` in `mainFrame, stylesheet, script, image, font, media`.
+   - `file://` `xhr` (fetch), `subFrame`, `object`, `ping`, `webSocket`, `other`: cancelled.
+   - `http(s)` / `ws(s)`: allowed (behaves like a browser tab).
+   - every other scheme (`phtauri://`, `asset://`, ...): cancelled.
+   - `setPermissionRequestHandler` denies everything (camera, notifications, ...).
+   - `setWindowOpenHandler` on the guest denies popups and forwards `http(s)` to `shell.openExternal`.
+   - `will-navigate` on the guest allows only `file://`; `http(s)` goes to `shell.openExternal`.
+   This matches what a browser lets a `file://` page do: render its sub resources, never read them
+   programmatically. Known residual exposure, same as in Chrome: `<script src="file:///x">` executes a
+   local file if it happens to be valid JS, and CSS parsing side channels on `<link rel=stylesheet>`.
+   A stricter option if ever needed: only allow `file://` sub resources under the previewed file's
+   directory tree (Firefox's policy), at the cost of breaking `../assets/...` references.
+5. **Which events fire on save.** Saving the previewed external html fires both `DocumentManager`
+   `documentSaved` and `LiveDevelopment.EVENT_LIVE_PREVIEW_RELOAD` (LiveDevelopment is "active" for some
+   other document). `ProjectManager.EVENT_PROJECT_FILE_CHANGED` does not fire for files outside the
+   project. Without guards the webview was recreated (scroll lost) and reloaded twice. The patch reloads
+   only from `documentSaved` and short-circuits the other paths while a file preview is showing.
+6. **URL encoding.** `_loadPreview` does `encodeURI(previewDetails.URL)`; a `file://` url built with
+   `encodeURIComponent` per path segment must skip that or `%20` becomes `%2520`. On Windows the drive
+   letter segment (`C:`) must not be encoded: `file:///C:/x/y.html`.
+7. **Cache busting when testing from source:** after editing, run
+   `fetch(url, {cache: "reload"})` for every edited file in the app, then `force_reload_phoenix`,
+   otherwise the heuristic http cache serves stale JS. The Electron main process needs an app restart
+   (`npm run serve:electron` in `phoenix-desktop`, or the phoenix-builder MCP `start_phoenix`).
+
+## Design of the prototype
+
+Phoenix side (this folder):
+
+- `NodeStaticServer.getPreviewDetails()` returns `{ URL: "file:///...", isFileProtocolPreview: true,
+  isNoPreview: false }` for external html when `Phoenix.isNativeApp && window.__ELECTRON__`.
+  It also makes `_lastPreviewedFilePath` sticky for external html, so switching to a sibling css/js
+  keeps previewing the html and a save of the sibling reloads it.
+- `main.js _loadPreview()` renders a `<webview id="panel-live-preview-frame" partition="live-preview-file">`
+  instead of the iframe when `isFileProtocolPreview` is set, reloads in place when the same url is forced,
+  skips `LiveDevelopment.openLivePreview()` and `StaticServer.redirectAllTabs()` (popped out tabs are
+  served by the http server and cannot load `file://`), and shows a dismissible banner
+  (`Strings.LIVE_PREVIEW_FILE_PROTOCOL_BANNER`, `.live-preview-file-banner` in `panel.html`).
+- `_popoutLivePreview()` opens the `file://` url directly with `NodeUtils.openUrlInBrowser` instead of the
+  tab loader page. Not verified on Windows (`Phoenix.app._openUrlInBrowserWin` path).
+- The `partition` attribute value must match `FILE_PREVIEW_PARTITION` in the Electron main process, which
+  refuses guests in any other partition.
+
+Electron side (`phoenix-desktop/src-electron`), rolled back on 2026-09-05, reproduced here:
+
+```js
+// main.js -------------------------------------------------------------------------------------------
+const { app, BrowserWindow, protocol, Menu, ipcMain, net, shell, session } = require('electron');
+
+// createWindow(): add to webPreferences of the main window (main-window-ipc.js does the same for
+// trusted-origin Phoenix windows created via 'create-window'):
+//     webviewTag: true
+
+// Session partition used by the live preview <webview> for file:// pages. In-memory (no `persist:`
+// prefix), so nothing a previewed page stores outlives the app. Must match Phoenix's `partition` attr.
+const FILE_PREVIEW_PARTITION = 'live-preview-file';
+// file:// sub-resource types a previewed page may load from disk. Mirrors what a normal browser tab
+// lets a file:// page do: render its scripts/styles/images/fonts/media.
+const FILE_PREVIEW_ALLOWED_RESOURCE_TYPES = new Set(['mainFrame', 'stylesheet', 'script', 'image', 'font', 'media']);
+
+function setupFilePreviewSession() {
+    const ses = session.fromPartition(FILE_PREVIEW_PARTITION);
+    ses.webRequest.onBeforeRequest((details, callback) => {
+        const url = details.url || '';
+        let allowed;
+        if (url.startsWith('file://')) {
+            allowed = FILE_PREVIEW_ALLOWED_RESOURCE_TYPES.has(details.resourceType);
+        } else {
+            // Remote resources behave as in a browser. Phoenix's own app schemes (phtauri://, asset://)
+            // and anything else internal must not be reachable from a previewed page.
+            allowed = /^(https?|wss?):/i.test(url);
+        }
+        if (!allowed) {
+            console.warn('file preview: blocked', details.resourceType, 'request to', url);
+        }
+        callback({ cancel: !allowed });
+    });
+    ses.setPermissionRequestHandler((_webContents, _permission, callback) => callback(false));
+}
+
+// Harden every <webview> guest created by any Phoenix window. The only legitimate use of <webview> in
+// Phoenix is the live preview of file:// pages, so anything else is refused outright.
+app.on('web-contents-created', (_event, contents) => {
+    contents.on('will-attach-webview', (event, webPreferences, params) => {
+        const src = params.src || '';
+        if (!src.startsWith('file://') || params.partition !== FILE_PREVIEW_PARTITION) {
+            console.error('webview attach denied - only file:// previews in the preview partition are allowed:',
+                src, params.partition);
+            event.preventDefault();
+            return;
+        }
+        // Never let the guest inherit Phoenix's preload/IPC bridge or any node access.
+        delete webPreferences.preload;
+        delete webPreferences.preloadURL;
+        webPreferences.nodeIntegration = false;
+        webPreferences.nodeIntegrationInSubFrames = false;
+        webPreferences.contextIsolation = true;
+        webPreferences.sandbox = true;
+        webPreferences.webSecurity = true;
+        webPreferences.allowRunningInsecureContent = false;
+        webPreferences.enableRemoteModule = false;
+    });
+
+    contents.on('did-attach-webview', (_evt, guest) => {
+        // Popups from the previewed page go to the system browser; the guest never spawns windows.
+        guest.setWindowOpenHandler(({ url }) => {
+            if (/^https?:\/\//i.test(url)) {
+                shell.openExternal(url);
+            }
+            return { action: 'deny' };
+        });
+        // The guest may only navigate between file:// pages. http(s) links open in the system browser
+        // so the remote page never runs inside the editor window.
+        guest.on('will-navigate', (evt, url) => {
+            if (url.startsWith('file://')) {
+                return;
+            }
+            evt.preventDefault();
+            if (/^https?:\/\//i.test(url)) {
+                shell.openExternal(url);
+            }
+        });
+    });
+});
+
+app.whenReady().then(async () => {
+    Menu.setApplicationMenu(null);
+    setupFilePreviewSession();   // before the first window is created
+    // ...existing protocol.handle('phtauri'/'asset') registrations and createWindow()
+});
+```
+
+## How it was verified (repeat this when re-implementing)
+
+Test fixture outside any project, e.g. `/tmp/lp/`: `lp_test.html` referencing sibling `lp_test.css` and
+`lp_test.js`, plus a `secret.txt`. With the file open in the editor and the panel visible, run from the
+Phoenix window (`exec_js` via the phoenix-builder MCP):
+
+```js
+const wv = document.getElementById("panel-live-preview-frame");     // expect tagName === "WEBVIEW"
+const run = (code) => wv.executeJavaScript(code).catch(e => "ERR:" + e.message);
+await run("document.body.innerText");                                 // sibling script ran
+await run("getComputedStyle(document.body).backgroundColor");         // sibling css applied
+await run("fetch('file:///tmp/lp/secret.txt').then(r=>r.text()).catch(e=>'blocked')");   // blocked
+await run("new Promise(r=>{const f=document.createElement('iframe');f.src='file:///tmp/lp/secret.txt';" +
+    "f.onload=()=>{try{r('LEAK:'+f.contentDocument.body.innerText)}catch(e){r('blocked')}};" +
+    "document.body.appendChild(f);setTimeout(()=>r('blocked'),3000)})");                 // blocked
+await run("fetch('phtauri://localhost/src/index.html').then(r=>r.status).catch(e=>'blocked')"); // blocked
+await run("JSON.stringify({require: typeof require, process: typeof process, electronAPI: typeof electronAPI})");
+// all "undefined"
+```
+
+Then: edit + save the html (same element, `did-finish-load` once, text updated), open the sibling css,
+edit + save (preview stays on the html and reloads), open a project html (iframe is back, banner hidden),
+open the external html again (webview is back). Also check a path with spaces renders
+(`file:///home/x/HTML%20Dashboard/signin.html`).
+
+## Open items for the real implementation
+
+- Windows popout via `_openUrlInBrowserWin` with a `file://` url is untested.
+- Decide whether saving a *project* file should also reload an external preview (prototype reloads on
+  every save while a file preview is showing; harmless but chatty).
+- Integration test: none written. `window._livePreviewIntegTest.currentLivePreviewURL` is set to the
+  `file://` url by the patch so a test can assert on it.
+- The packaged Electron shell must be rebuilt for the main-process change; the AppImage in
+  `~/.phoenix-code` will not pick it up.
+- Consider surfacing the blocked-request warnings (`file preview: blocked ...` on the Electron stderr) in
+  the panel so users understand why a fetch in their page fails.
+
+## Full patch for this repo (as of 2026-09-05, applies on top of commit 22792888e)
+
+```diff
+diff --git a/src/extensionsIntegrated/Phoenix-live-preview/NodeStaticServer.js b/src/extensionsIntegrated/Phoenix-live-preview/NodeStaticServer.js
+index 26f2c577a..597de0434 100644
+--- a/src/extensionsIntegrated/Phoenix-live-preview/NodeStaticServer.js
++++ b/src/extensionsIntegrated/Phoenix-live-preview/NodeStaticServer.js
+@@ -599,8 +599,43 @@ define(function (require, exports, module) {
+             + `&isLoggingEnabled=${logger.loggingOptions.logLivePreview}`;
+     }
+ 
++    /**
++     * Whether HTML files outside the project can be previewed as plain `file://` pages. Only the Electron desktop
++     * shell supports this: it hosts the page in a hardened `<webview>` (see the Electron main process), so the file
++     * gets the browser's own file:// sandbox instead of being served by the live preview http server, which could
++     * otherwise be used by a malicious page to walk the disk and exfiltrate files.
++     * @return {boolean}
++     */
++    function isFileProtocolPreviewSupported() {
++        return !!(Phoenix.isNativeApp && window.__ELECTRON__);
++    }
++
++    /**
++     * Converts a VFS path of a native file to a `file://` URL the desktop shell can load.
++     * @param {string} fullPath VFS path, Eg. `/tauri/home/user/x.html` or `/tauri/C:/x/y.html`
++     * @return {string} Eg. `file:///home/user/x.html` or `file:///C:/x/y.html`
++     */
++    function _getFileProtocolURL(fullPath) {
++        const platformPath = Phoenix.fs.getTauriPlatformPath(fullPath).replace(/\\/g, "/");
++        const segments = platformPath.split("/").map((segment, index) => {
++            if(index === 0 && /^[a-zA-Z]:$/.test(segment)) {
++                return segment; // windows drive letter `C:` should not be url encoded
++            }
++            return encodeURIComponent(segment);
++        });
++        const urlPath = segments.join("/");
++        return `file://${urlPath.startsWith("/") ? "" : "/"}${urlPath}`;
++    }
++
+     function _getExternalPreviewURL(fullPath) {
+         if(utils.isHTMLFile(fullPath)) {
++            if(isFileProtocolPreviewSupported()) {
++                return {
++                    url: _getFileProtocolURL(fullPath),
++                    isNoPreview: false,
++                    isFileProtocolPreview: true
++                };
++            }
+             return {
+                 url: getNoPreviewURL(Strings.DESCRIPTION_LIVEDEV_PREVIEW_RESTRICTED,
+                     Strings.DESCRIPTION_LIVEDEV_PREVIEW_RESTRICTED_DETAILS),
+@@ -664,12 +699,24 @@ define(function (require, exports, module) {
+                 }
+                 const projectRoot = ProjectManager.getProjectRoot().fullPath;
+                 let fullPath = currentFile.fullPath;
++                if(!utils.isPreviewableFile(fullPath) && _lastPreviewedFilePath
++                    && !ProjectManager.isWithinProject(_lastPreviewedFilePath)
++                    && await FileSystem.existsAsync(_lastPreviewedFilePath)) {
++                    // The user is previewing an html file outside the project (as a file:// page) and switched
++                    // to a css/js/other non-previewable file. Keep showing the external page, same as we do for
++                    // project files below, so that reload on save of a related file refreshes the right page.
++                    fullPath = _lastPreviewedFilePath;
++                }
+                 if(!ProjectManager.isWithinProject(fullPath)){
+                     // external project file. Use secure external preview link.
+                     const preview = _getExternalPreviewURL(fullPath);
++                    if(preview.isFileProtocolPreview) {
++                        _lastPreviewedFilePath = fullPath;
++                    }
+                     resolve({
+                         URL: preview.url,
+                         isNoPreview: preview.isNoPreview,
++                        isFileProtocolPreview: !!preview.isFileProtocolPreview,
+                         filePath: fullPath,
+                         fullPath: fullPath,
+                         isMarkdownFile: utils.isMarkdownFile(fullPath),
+diff --git a/src/extensionsIntegrated/Phoenix-live-preview/main.js b/src/extensionsIntegrated/Phoenix-live-preview/main.js
+index fa73d43a5..3b6df4593 100644
+--- a/src/extensionsIntegrated/Phoenix-live-preview/main.js
++++ b/src/extensionsIntegrated/Phoenix-live-preview/main.js
+@@ -151,6 +151,25 @@ define(function (require, exports, module) {
+     </iframe>
+     `;
+ 
++    /**
++     * Electron desktop only: HTML files outside the project are previewed as plain `file://` pages inside a
++     * `<webview>` (Chromium refuses `file://` in an `<iframe>` hosted by a non-file origin). The Electron main
++     * process hardens the guest (no preload/node, only file:// navigation, links open in the system browser).
++     * @param {string} fileURL the `file://` url to load
++     * @return {string} html
++     */
++    function _getFileProtocolWebviewHTML(fileURL) {
++        const $webview = $(`<webview id="${LIVE_PREVIEW_IFRAME_ID}" title="Live Preview"
++             partition="live-preview-file" style="border: none; display: inline-flex; width: 100%; height: 100%">
++        </webview>`);
++        $webview.attr("src", fileURL);
++        return $webview;
++    }
++
++    function _isFileProtocolWebview($el) {
++        return !!($el && $el[0] && $el[0].tagName && $el[0].tagName.toLowerCase() === "webview");
++    }
++
+     // Mdviewer renders untrusted markdown — tighter sandbox than live preview:
+     // no allow-same-origin (prevents malicious scripts from accessing Phoenix context),
+     // no allow-forms, allow-pointer-lock (not needed for markdown editing).
+@@ -197,6 +216,9 @@ define(function (require, exports, module) {
+         $fullScreenBtn;
+ 
+     let customLivePreviewBannerShown = false;
++    // true while the panel shows a non-project html file as a static file:// page (Electron desktop only)
++    let currentPreviewIsFileProtocol = false;
++    let fileProtocolBannerDismissed = false;
+ 
+     // live Preview overlay variables (overlays are shown when live preview is connecting or there's a syntax error)
+     let $statusOverlay = null; // reference to the static overlay element
+@@ -240,7 +262,7 @@ define(function (require, exports, module) {
+     }
+ 
+     StaticServer.on(EVENT_EMBEDDED_IFRAME_WHO_AM_I, function () {
+-        if($iframe && $iframe[0]) {
++        if($iframe && $iframe[0] && $iframe[0].contentWindow) {
+             const iframeDom = $iframe[0];
+             iframeDom.contentWindow.postMessage({
+                 type: "WHO_AM_I_RESPONSE",
+@@ -706,6 +728,21 @@ define(function (require, exports, module) {
+ 
+     const ALLOWED_BROWSERS_NAMES = [`chrome`, `firefox`, `safari`, `edge`, `browser`, `browserPrivate`];
+     function _popoutLivePreview(browserName) {
++        if(currentPreviewIsFileProtocol) {
++            // file:// pages cannot be routed through the live preview tab loader page; open them directly.
++            const browserToUse = ALLOWED_BROWSERS_NAMES.includes(browserName) ? browserName : "browser";
++            Metrics.countEvent(Metrics.EVENT_TYPE.LIVE_PREVIEW, "popoutFile", browserToUse);
++            NodeUtils.openUrlInBrowser(currentLivePreviewURL, browserToUse)
++                .catch(err=>{
++                    console.error("Error opening file url in browser: ", browserToUse, err);
++                    Dialogs.showModalDialog(
++                        DefaultDialogs.DIALOG_ID_ERROR,
++                        StringUtils.format(Strings.LIVE_DEV_OPEN_ERROR_TITLE, browserToUse),
++                        StringUtils.format(Strings.LIVE_DEV_OPEN_ERROR_MESSAGE, browserToUse)
++                    );
++                });
++            return;
++        }
+         // We cannot use $iframe.src here if panel is hidden
+         const openURL = StaticServer.getTabPopoutURL(currentLivePreviewURL);
+         // In design mode the LP panel fills the editor area — hiding it would
+@@ -864,6 +901,10 @@ define(function (require, exports, module) {
+         $panel.find(".custom-server-banner-close-icon").on("click", ()=>{
+             $panel.find(".live-preview-custom-banner").addClass("forced-hidden");
+         });
++        $panel.find(".file-banner-close-icon").on("click", ()=>{
++            fileProtocolBannerDismissed = true;
++            _hideFileProtocolBanner();
++        });
+         // The previewed iframe does not reliably fire mouseout/mouseleave on a slow pointer exit,
+         // leaving the hover highlight/box stuck. Detect the leave parent-side and forward a clear.
+         $panel.on("mouseleave", "#panel-live-preview-frame", function () {
+@@ -1022,6 +1063,51 @@ define(function (require, exports, module) {
+         Metrics.countEvent(Metrics.EVENT_TYPE.LIVE_PREVIEW, "render", "mdviewr");
+     }
+ 
++    function _hideFileProtocolBanner() {
++        $panel.find(".live-preview-file-banner").addClass("forced-hidden");
++    }
++
++    /**
++     * Shows the given file:// url in a webview in place of the live preview iframe. A static page has no live
++     * edit transport, so any forced load of the url it already shows is a plain reload, done in place to retain
++     * scroll position etc.
++     * @param {string} fileURL
++     */
++    function _showFileProtocolPreview(fileURL) {
++        if(!fileProtocolBannerDismissed) {
++            $panel.find(".live-preview-file-banner").removeClass("forced-hidden");
++        }
++        if(_isFileProtocolWebview($iframe) && $iframe.attr('src') === fileURL) {
++            $iframe[0].reload();
++            return;
++        }
++        const newWebview = _getFileProtocolWebviewHTML(fileURL);
++        newWebview.insertAfter($iframe);
++        // Don't remove the md iframe — it's persistent and already hidden
++        if (!$mdviewrIframe || $iframe[0] !== $mdviewrIframe[0]) {
++            $iframe.remove();
++        }
++        $iframe = newWebview;
++        if(Phoenix.isTestWindow) {
++            window._livePreviewIntegTest.currentLivePreviewURL = fileURL;
++            window._livePreviewIntegTest.urlLoadCount++;
++        }
++    }
++
++    /**
++     * file:// previews have no live edit transport, so we reload the page on any document save while one is shown.
++     */
++    function _documentSaved() {
++        if(!currentPreviewIsFileProtocol || !panel.isVisible()) {
++            return;
++        }
++        if(_isFileProtocolWebview($iframe)) {
++            $iframe[0].reload();
++        } else {
++            _loadPreview(true, true);
++        }
++    }
++
+     async function _loadPreview(force, isReload) {
+         // we wait till the first server ready event is received till we render anything. else a 404-page may
+         // briefly flash on first load of phoenix as we try to load the page before the server is available.
+@@ -1082,7 +1168,8 @@ define(function (require, exports, module) {
+             }
+             _updateLPControlsForMdviewer();
+         }
+-        let newSrc = encodeURI(previewDetails.URL);
++        // file:// urls are already fully encoded; encodeURI would double encode the `%` escapes.
++        let newSrc = previewDetails.isFileProtocolPreview ? previewDetails.URL : encodeURI(previewDetails.URL);
+         if($iframe.attr('src') === newSrc && !force){
+             // we already have this url loaded in previews!
+             return;
+@@ -1094,7 +1181,7 @@ define(function (require, exports, module) {
+             currentLivePreviewURL = newSrc;
+             _setPreviewedFile(previewDetails.fullPath);
+         }
+-        if(isReload && previewDetails.isHTMLFile){
++        if(isReload && previewDetails.isHTMLFile && !previewDetails.isFileProtocolPreview){
+             LiveDevelopment.openLivePreview();
+         }
+         let relativeOrFullPath= ProjectManager.makeProjectRelativeIfPossible(currentPreviewFile);
+@@ -1111,25 +1198,35 @@ define(function (require, exports, module) {
+                         LivePreviewSettings.getCustomServeBaseURL())
+                 );
+             }
+-            let newIframe = $(LIVE_PREVIEW_IFRAME_HTML);
+-            newIframe.insertAfter($iframe);
+-            // Don't remove the md iframe — it's persistent and already hidden
+-            if (!$mdviewrIframe || $iframe[0] !== $mdviewrIframe[0]) {
+-                $iframe.remove();
+-            }
+-            $iframe = newIframe;
+-            if(_isProjectPreviewTrusted()){
+-                $iframe.attr('src', currentLivePreviewURL);
+-                if(Phoenix.isTestWindow) {
+-                    window._livePreviewIntegTest.currentLivePreviewURL = currentLivePreviewURL;
+-                    window._livePreviewIntegTest.urlLoadCount++;
+-                }
++            if(previewDetails.isFileProtocolPreview) {
++                _showFileProtocolPreview(currentLivePreviewURL);
+             } else {
+-                $iframe.attr('srcdoc', _getTrustProjectPage());
++                _hideFileProtocolBanner();
++                let newIframe = $(LIVE_PREVIEW_IFRAME_HTML);
++                newIframe.insertAfter($iframe);
++                // Don't remove the md iframe — it's persistent and already hidden
++                if (!$mdviewrIframe || $iframe[0] !== $mdviewrIframe[0]) {
++                    $iframe.remove();
++                }
++                $iframe = newIframe;
++                if(_isProjectPreviewTrusted()){
++                    $iframe.attr('src', currentLivePreviewURL);
++                    if(Phoenix.isTestWindow) {
++                        window._livePreviewIntegTest.currentLivePreviewURL = currentLivePreviewURL;
++                        window._livePreviewIntegTest.urlLoadCount++;
++                    }
++                } else {
++                    $iframe.attr('srcdoc', _getTrustProjectPage());
++                }
+             }
+         }
++        currentPreviewIsFileProtocol = !!previewDetails.isFileProtocolPreview;
+         Metrics.countEvent(Metrics.EVENT_TYPE.LIVE_PREVIEW, "render",
+             utils.getExtension(previewDetails.fullPath));
++        if(currentPreviewIsFileProtocol) {
++            // popped out browser tabs are served by the live preview http server and cannot load file:// pages.
++            return;
++        }
+         StaticServer.redirectAllTabs(currentLivePreviewURL, force);
+         if(Phoenix.isTestWindow) {
+             // for integ tests
+@@ -1143,6 +1240,10 @@ define(function (require, exports, module) {
+             // MarkdownSync handles live content updates for markdown files
+             return;
+         }
++        if(currentPreviewIsFileProtocol) {
++            // file:// previews are reloaded in place by _documentSaved on every save.
++            return;
++        }
+         if(changedFile && changedFile.isFile && (utils.isPreviewableFile(changedFile.fullPath) ||
+             utils.isServerRenderedFile(changedFile.fullPath))){
+             // we are getting this change event somehow.
+@@ -1234,6 +1335,7 @@ define(function (require, exports, module) {
+         _switchToEditModeIfNeeded();
+         customLivePreviewBannerShown = false;
+         $panel.find(".live-preview-custom-banner").addClass("forced-hidden");
++        _hideFileProtocolBanner();
+         _openReadmeMDIfFirstTime();
+         _customServerMetrics();
+         if(!LiveDevelopment.isActive()
+@@ -1508,6 +1610,7 @@ define(function (require, exports, module) {
+         StaticServer.init();
+         LiveDevServerManager.registerServer({ create: _createStaticServer }, 5);
+         ProjectManager.on(ProjectManager.EVENT_PROJECT_FILE_CHANGED, _projectFileChanges);
++        DocumentManager.on("documentSaved", _documentSaved);
+         ProjectManager.on(ProjectManager.EVENT_PROJECT_OPEN, _projectOpened);
+         ProjectManager.on(ProjectManager.EVENT_PROJECT_CLOSE, _projectClosed);
+         EditorManager.on("activeEditorChange", _activeDocChanged);
+@@ -1597,6 +1700,10 @@ define(function (require, exports, module) {
+             // in firefox security posture, the third party live preview iframe phcode.live itself cannot activate
+             // the service worker. So we have to reload the iframe from its parent- ie. phcode.dev. This is not
+             // required in chrome, but we just keep it just for all platforms behaving the same.
++            if(currentPreviewIsFileProtocol) {
++                // static file:// previews are reloaded by _documentSaved; avoid a second reload here.
++                return;
++            }
+             _loadPreview(true);
+         });
+ 
+diff --git a/src/extensionsIntegrated/Phoenix-live-preview/panel.html b/src/extensionsIntegrated/Phoenix-live-preview/panel.html
+index 1a24d179a..72047a7a1 100644
+--- a/src/extensionsIntegrated/Phoenix-live-preview/panel.html
++++ b/src/extensionsIntegrated/Phoenix-live-preview/panel.html
+@@ -66,6 +66,12 @@
+            style="margin-left: 10px;margin-right: 10px;cursor: pointer;"
+            title="{{Strings.CLOSE}}"></i>
+     </div>
++    <div class="live-preview-file-banner forced-hidden">
++        <span class="live-preview-banner-message">{{Strings.LIVE_PREVIEW_FILE_PROTOCOL_BANNER}}</span>
++        <i class="fa fa-close file-banner-close-icon"
++           style="margin-left: 10px;margin-right: 10px;cursor: pointer;"
++           title="{{Strings.CLOSE}}"></i>
++    </div>
+     <div class="live-preview-status-overlay forced-hidden">
+         <span class="live-preview-overlay-message"><!-- the msg will come here dynamically --></span>
+         <i class="fa fa-times live-preview-overlay-close" title="{{Strings.LIVE_PREVIEW_HIDE_OVERLAY}}"></i>
+diff --git a/src/nls/root/strings.js b/src/nls/root/strings.js
+index a45d9cbae..d2fae8659 100644
+--- a/src/nls/root/strings.js
++++ b/src/nls/root/strings.js
+@@ -800,6 +800,7 @@ define({
+     "IMAGE_SEARCH_PRO_THROTTLE_TITLE": "Image search limit reached",
+     "IMAGE_SEARCH_PRO_THROTTLE_MESSAGE": "Image search is temporarily unavailable due to high demand. This usually clears within an hour — please try again shortly.",
+     "LIVE_PREVIEW_CUSTOM_SERVER_BANNER": "Getting preview from your custom server {0}",
++    "LIVE_PREVIEW_FILE_PROTOCOL_BANNER": "This file is outside the project, so it is shown as a static page that reloads when you save. Live editing is unavailable.",
+     "LIVE_PREVIEW_MODE_TOGGLE_PREVIEW": "Toggle Preview Mode (F8)",
+     "LIVE_PREVIEW_MODE_TOGGLE_EDIT": "Toggle Edit Mode (F8)",
+     "LIVE_PREVIEW_MODE_PREVIEW": "Preview Mode",
+diff --git a/src/styles/brackets.less b/src/styles/brackets.less
+index 003730747..f4146581b 100644
+--- a/src/styles/brackets.less
++++ b/src/styles/brackets.less
+@@ -4194,7 +4194,8 @@ label input {
+ 
+ /* Live Preview */
+ 
+-.live-preview-custom-banner {
++.live-preview-custom-banner,
++.live-preview-file-banner {
+     display: flex;
+     flex-direction: row;
+     background-color: #1E90FF;
+```
diff --git a/src/extensionsIntegrated/Phoenix-live-preview/NodeStaticServer.js b/src/extensionsIntegrated/Phoenix-live-preview/NodeStaticServer.js
index 26f2c577a6..0d9c4d067b 100644
--- a/src/extensionsIntegrated/Phoenix-live-preview/NodeStaticServer.js
+++ b/src/extensionsIntegrated/Phoenix-live-preview/NodeStaticServer.js
@@ -599,6 +599,14 @@ define(function (require, exports, module) {
             + `&isLoggingEnabled=${logger.loggingOptions.logLivePreview}`;
     }
 
+    /**
+     * Preview url for a file outside the current project. Html files get the "Preview Unavailable" page on purpose:
+     * serving them over the live preview http server would let a malicious page walk the disk and exfiltrate
+     * files. A verified prototype that shows them as static `file://` pages in an Electron `<webview>` instead is
+     * documented in `FILE_PROTOCOL_PREVIEW_NOTES.md` in this folder; use it when this restriction is revisited.
+     * @param {string} fullPath
+     * @return {{url: string, isNoPreview: boolean}}
+     */
     function _getExternalPreviewURL(fullPath) {
         if(utils.isHTMLFile(fullPath)) {
             return {
@@ -646,7 +654,8 @@ define(function (require, exports, module) {
 
     /**
      * Finds out a {URL,filePath} to live preview from the project. Will return and empty object if the current
-     * file is not previewable.
+     * file is not previewable. For files outside the project see `_getExternalPreviewURL` and
+     * `FILE_PROTOCOL_PREVIEW_NOTES.md` (static `file://` preview prototype, not implemented yet).
      * @return {Promise<*>}
      */
     async function getPreviewDetails() {
diff --git a/src/extensionsIntegrated/Phoenix-live-preview/main.js b/src/extensionsIntegrated/Phoenix-live-preview/main.js
index fa73d43a52..13f96a0b15 100644
--- a/src/extensionsIntegrated/Phoenix-live-preview/main.js
+++ b/src/extensionsIntegrated/Phoenix-live-preview/main.js
@@ -705,6 +705,12 @@ define(function (require, exports, module) {
     }
 
     const ALLOWED_BROWSERS_NAMES = [`chrome`, `firefox`, `safari`, `edge`, `browser`, `browserPrivate`];
+    /**
+     * Opens the current preview url in a browser tab through the live preview tab loader page. If static `file://`
+     * previews of non-project html are ever added (see `FILE_PROTOCOL_PREVIEW_NOTES.md`), those urls cannot go
+     * through the tab loader and must be opened directly.
+     * @param {string} [browserName] one of ALLOWED_BROWSERS_NAMES, else the default browser
+     */
     function _popoutLivePreview(browserName) {
         // We cannot use $iframe.src here if panel is hidden
         const openURL = StaticServer.getTabPopoutURL(currentLivePreviewURL);
@@ -1022,6 +1028,14 @@ define(function (require, exports, module) {
         Metrics.countEvent(Metrics.EVENT_TYPE.LIVE_PREVIEW, "render", "mdviewr");
     }
 
+    /**
+     * Renders the current preview target into the panel iframe. Note: html files outside the project currently
+     * get the "Preview Unavailable" page. A verified prototype that instead renders them as static `file://`
+     * pages in an Electron `<webview>` (with reload on save) is documented, with the full patch, in
+     * `FILE_PROTOCOL_PREVIEW_NOTES.md` in this folder. Read it before touching the external file flow here.
+     * @param {boolean} force reload even if the url is unchanged
+     * @param {boolean} isReload true when the user explicitly asked for a reload
+     */
     async function _loadPreview(force, isReload) {
         // we wait till the first server ready event is received till we render anything. else a 404-page may
         // briefly flash on first load of phoenix as we try to load the page before the server is available.