Java 7: Problems launching applets with jars on "file://" location

Question

Hi,
We are experiencing a problem when updating our client's JRE from Java6 U 21 up to Java7 U 55.
We have developed an Applet which is composed by several JAR files. Some of those JARs must be stored in local drive, and the JAR with the main Java class is stored on server.
Let's supose we have a similar scenario like this:
https://blahblahbah/bar.jar
https://blahblahbah/test.html
C:/foo.jar
The code of test.html:
<embed
  archive="file:///C:/foo.jar"
  cache_archive="bar.jar"
/>
This code works fine on Java 6 and Applet is correctly loaded.
However, with Java 7 a security exception is raised when trying to load JAR files from "file:///" location during Applet launch:
java.lang.SecurityException: Permission denied: file:/C:/foo.jar
    at sun.plugin2.applet.Applet2Manager._loadJarFiles(Unknown Source)
We have tried several tests using a java.policy file which grants all possible permisions:
grant codeBase "file:/C:/foo.jar" {
    permission java.security.AllPermission;
grant {
  permission java.security.AllPermission;
We also tried to low Java's security level to "MEDIUM", with no success.
We finally only managed to run the Applet if we explicity disable the "Next-Generation Plugin" with Internet Explorer 8. However, that's not a suitable solution, and still does not work with Mozilla family browsers.
Eventhought with Mozilla browsers is still not working.
Is there any restrictions in Java 7 that prevents to read jars from being loaded from local drive when launching Applets?
Thanks in advance,

Answer 1

Thank you baftos.
I had read the whole message before posting mine. It's not the same problem. I'm able to run the sample signed applet always having the jar in the same location than the HTML page serving the applet via JNLP:
<jar href="SignedAppletTest.jar" main="true"/>
However, the security exception raises when trying to read that jar from local drive:
<jar href="file://C:/SignedAppletTest.jar" main="true"/>
ExitException[ 3]java.lang.SecurityException: Permission denied: file://C:/SignedAppletTest.jar
    at sun.plugin2.applet.JNLP2Manager.loadJarFiles(Unknown Source)
I have even tried to decompile JNLP2Manager class, without seeing anything useful on that loadJarFiles method
The only way I managed to avoid the problem is unchecking the New Generation Plugin and running the Applet with IE. Not a suitable solution for me at all..