diff --git a/repos/base/include/base/child.h b/repos/base/include/base/child.h
index c23683c5cb..b6dab9deb1 100644
--- a/repos/base/include/base/child.h
+++ b/repos/base/include/base/child.h
@@ -192,6 +192,14 @@ struct Genode::Child_policy
 	 */
 	virtual void session_state_changed() { }
 
+	/**
+	 * Granularity of allocating the backing store for session meta data
+	 *
+	 * Session meta data is allocated from 'ref_ram'. The first batch of
+	 * session-state objects is allocated at child-construction time.
+	 */
+	virtual size_t session_alloc_batch_size() const { return 16; }
+
 	/**
 	 * Return region map for the child's address space
 	 *
@@ -301,6 +309,16 @@ class Genode::Child : protected Rpc_object<Parent>,
 		/* sessions opened by the child */
 		Id_space<Client> _id_space;
 
+		/* allocator used for dynamically created session state objects */
+		Sliced_heap _session_md_alloc { _policy.ref_ram(), _local_rm };
+
+		Session_state::Factory::Batch_size const
+			_session_batch_size { _policy.session_alloc_batch_size() };
+
+		/* factory for dynamically created  session-state objects */
+		Session_state::Factory _session_factory { _session_md_alloc,
+		                                          _session_batch_size };
+
 		typedef Session_state::Args Args;
 
 		static Child_policy::Route _resolve_session_request(Child_policy &,
@@ -313,12 +331,6 @@ class Genode::Child : protected Rpc_object<Parent>,
 
 		void _try_construct_env_dependent_members();
 
-		/* heap for child-specific allocations using the child's quota */
-		Constructible<Heap> _heap;
-
-		/* factory for dynamically created  session-state objects */
-		Constructible<Session_state::Factory> _session_factory;
-
 		Constructible<Initial_thread> _initial_thread;
 
 		struct Process
@@ -584,11 +596,6 @@ class Genode::Child : protected Rpc_object<Parent>,
 			return ram_quota - env_ram_quota();
 		}
 
-		/**
-		 * Return heap that uses the child's quota
-		 */
-		Allocator &heap() { return *_heap; }
-
 		Ram_session_capability ram_session_cap() const { return _ram.cap(); }
 
 		Parent_capability parent_cap() const { return cap(); }
@@ -597,24 +604,10 @@ class Genode::Child : protected Rpc_object<Parent>,
 		Cpu_session &cpu() { return _cpu.session(); }
 		Pd_session  &pd()  { return _pd .session(); }
 
-		/**
-		 * Exception type
-		 */
-		class Inactive : Exception { };
-
 		/**
 		 * Request factory for creating session-state objects
-		 *
-		 * \throw Inactive  factory cannot by provided because the child it
-		 *                  not yet completely initialized.
 		 */
-		Session_state::Factory &session_factory()
-		{
-			if (_session_factory.constructed())
-				return *_session_factory;
-
-			throw Inactive();
-		}
+		Session_state::Factory &session_factory() { return _session_factory; }
 
 		/**
 		 * Instruct the child to yield resources
diff --git a/repos/base/include/base/local_connection.h b/repos/base/include/base/local_connection.h
index c45b917cc1..2fbb7ce32d 100644
--- a/repos/base/include/base/local_connection.h
+++ b/repos/base/include/base/local_connection.h
@@ -35,7 +35,7 @@ struct Genode::Local_connection_base : Noncopyable
 
 	protected:
 
-		Session_state _session_state;
+		Constructible<Session_state> _session_state;
 
 	private:
 
@@ -59,18 +59,31 @@ struct Genode::Local_connection_base : Noncopyable
 		                      Parent::Client::Id id,
 		                      Args const &args, Affinity const &affinity,
 		                      size_t ram_quota)
-		:
-			_session_state(service, id_space, id, label_from_args(args.string()),
-			               _init_args(args, ram_quota), affinity)
 		{
-			_session_state.service().initiate_request(_session_state);
+			enum { NUM_ATTEMPTS = 10 };
+			for (unsigned i = 0; i < NUM_ATTEMPTS; i++) {
+				_session_state.construct(service, id_space, id,
+				                         label_from_args(args.string()),
+				                         _init_args(args, ram_quota), affinity);
+
+				_session_state->service().initiate_request(*_session_state);
+
+				if (_session_state->phase == Session_state::QUOTA_EXCEEDED)
+					ram_quota += 4096;
+				else
+					break;
+			}
+
+			if (_session_state->phase == Session_state::QUOTA_EXCEEDED)
+				warning("giving up to increase session quota for ", service.name(), " session "
+				        "after ", (int)NUM_ATTEMPTS, " attempts");
 		}
 
 		~Local_connection_base()
 		{
-			if (_session_state.alive()) {
-				_session_state.phase = Session_state::CLOSE_REQUESTED;
-				_session_state.service().initiate_request(_session_state);
+			if (_session_state->alive()) {
+				_session_state->phase = Session_state::CLOSE_REQUESTED;
+				_session_state->service().initiate_request(*_session_state);
 			}
 		}
 };
@@ -89,7 +102,7 @@ class Genode::Local_connection : Local_connection_base
 
 		Capability<SESSION> cap() const
 		{
-			return reinterpret_cap_cast<SESSION>(_session_state.cap);
+			return reinterpret_cap_cast<SESSION>(_session_state->cap);
 		}
 
 		SESSION &session()
@@ -99,15 +112,15 @@ class Genode::Local_connection : Local_connection_base
 			 * RAM session, we return the reference to the corresponding
 			 * component object, which can be called directly.
 			 */
-			if (_session_state.local_ptr)
-				return *static_cast<SESSION *>(_session_state.local_ptr);
+			if (_session_state->local_ptr)
+				return *static_cast<SESSION *>(_session_state->local_ptr);
 
 			/*
 			 * The session is provided remotely. So return a client stub for
 			 * interacting with the session. We construct the client object if
 			 * we have a valid session capability.
 			 */
-			if (!_client.constructed() && _session_state.cap.valid())
+			if (!_client.constructed() && _session_state->cap.valid())
 				_client.construct(cap());
 
 			if (_client.constructed())
@@ -117,7 +130,7 @@ class Genode::Local_connection : Local_connection_base
 			 * This error is printed if the session could not be
 			 * established or the session is provided by a child service.
 			 */
-			error(SESSION::service_name(), " session (", _session_state.args(), ") "
+			error(SESSION::service_name(), " session (", _session_state->args(), ") "
 			      "unavailable");
 			throw Parent::Service_denied();
 		}
diff --git a/repos/base/include/base/service.h b/repos/base/include/base/service.h
index e9207e3ddf..200df961ae 100644
--- a/repos/base/include/base/service.h
+++ b/repos/base/include/base/service.h
@@ -130,7 +130,10 @@ class Genode::Local_service : public Service
 			class Denied : Exception { };
 
 			/**
+			 * Create session
+			 *
 			 * \throw Denied
+			 * \throw Quota_exceeded
 			 */
 			virtual SESSION &create(Args const &, Affinity)  = 0;
 
@@ -200,6 +203,8 @@ class Genode::Local_service : public Service
 				}
 				catch (typename Factory::Denied) {
 					session.phase = Session_state::INVALID_ARGS; }
+				catch (Quota_exceeded) {
+					session.phase = Session_state::QUOTA_EXCEEDED; }
 
 				break;
 
@@ -225,6 +230,7 @@ class Genode::Local_service : public Service
 				break;
 
 			case Session_state::INVALID_ARGS:
+			case Session_state::QUOTA_EXCEEDED:
 			case Session_state::AVAILABLE:
 			case Session_state::CAP_HANDED_OUT:
 			case Session_state::CLOSED:
@@ -317,6 +323,7 @@ class Genode::Parent_service : public Service
 				break;
 
 			case Session_state::INVALID_ARGS:
+			case Session_state::QUOTA_EXCEEDED:
 			case Session_state::AVAILABLE:
 			case Session_state::CAP_HANDED_OUT:
 			case Session_state::CLOSED:
diff --git a/repos/base/include/base/session_state.h b/repos/base/include/base/session_state.h
index 6ef8b66661..2f956e0670 100644
--- a/repos/base/include/base/session_state.h
+++ b/repos/base/include/base/session_state.h
@@ -18,6 +18,7 @@
 #include <util/list.h>
 #include <util/reconstructible.h>
 #include <session/capability.h>
+#include <base/slab.h>
 #include <base/id_space.h>
 #include <base/env.h>
 #include <base/log.h>
@@ -78,6 +79,7 @@ class Genode::Session_state : public Parent::Client, public Parent::Server,
 
 		enum Phase { CREATE_REQUESTED,
 		             INVALID_ARGS,
+		             QUOTA_EXCEEDED,
 		             AVAILABLE,
 		             CAP_HANDED_OUT,
 		             UPGRADE_REQUESTED,
@@ -182,6 +184,7 @@ class Genode::Session_state : public Parent::Client, public Parent::Server,
 
 			case CREATE_REQUESTED:
 			case INVALID_ARGS:
+			case QUOTA_EXCEEDED:
 			case CLOSED:
 				return false;
 
@@ -234,17 +237,34 @@ class Genode::Session_state::Factory : Noncopyable
 {
 	private:
 
-		Allocator &_md_alloc;
+		size_t const _batch_size;
+
+		Slab _slab;
 
 	public:
 
+		struct Batch_size { size_t value; };
+
 		/**
 		 * Constructor
 		 *
 		 * \param md_alloc  meta-data allocator used for allocating
 		 *                  'Session_state' objects
+		 *
+		 * \param batch     granularity of allocating blocks at 'md_alloc',
+		 *                  must be greater than 0
 		 */
-		Factory(Allocator &md_alloc) : _md_alloc(md_alloc) { }
+		Factory(Allocator &md_alloc, Batch_size batch)
+		:
+			_batch_size(batch.value),
+			/*
+			 * The calculation of 'block_size' is just an approximation as
+			 * a slab block contains a few bytes of meta data in addition
+			 * to the actual slab entries.
+			 */
+			_slab(sizeof(Session_state), sizeof(Session_state)*_batch_size,
+			      nullptr, &md_alloc)
+		{ }
 
 		/**
 		 * Create a new session-state object
@@ -256,11 +276,16 @@ class Genode::Session_state::Factory : Noncopyable
 		template <typename... ARGS>
 		Session_state &create(ARGS &&... args)
 		{
-			Session_state &session = *new (_md_alloc) Session_state(args...);
+			Session_state &session = *new (_slab) Session_state(args...);
 			session.owner(*this);
 			return session;
 		}
 
+		/**
+		 * Return number of bytes consumed per session
+		 */
+		size_t session_costs() const { return _slab.overhead(sizeof(Session_state)); }
+
 	private:
 
 		/*
@@ -270,7 +295,7 @@ class Genode::Session_state::Factory : Noncopyable
 		 */
 		friend class Session_state;
 
-		void _destroy(Session_state &session) { Genode::destroy(_md_alloc, &session); }
+		void _destroy(Session_state &session) { Genode::destroy(_slab, &session); }
 };
 
 
diff --git a/repos/base/include/base/slab.h b/repos/base/include/base/slab.h
index b4a7be6133..9f16664e48 100644
--- a/repos/base/include/base/slab.h
+++ b/repos/base/include/base/slab.h
@@ -101,6 +101,14 @@ class Genode::Slab : public Allocator
 		 */
 		~Slab();
 
+		/**
+		 * Return number of bytes consumed per slab entry
+		 *
+		 * The function takes the slab-internal meta-data needs and the actual
+		 * slab entry into account.
+		 */
+		static size_t entry_costs(size_t slab_size, size_t block_size);
+
 		/**
 		 * Add new slab block as backing store
 		 *
diff --git a/repos/base/include/io_mem_session/connection.h b/repos/base/include/io_mem_session/connection.h
index 7ac62ff531..779e92a7b2 100644
--- a/repos/base/include/io_mem_session/connection.h
+++ b/repos/base/include/io_mem_session/connection.h
@@ -30,7 +30,7 @@ struct Genode::Io_mem_connection : Connection<Io_mem_session>, Io_mem_session_cl
 	Capability<Io_mem_session> _session(Parent &parent, addr_t base, size_t size,
 	                                    bool write_combined)
 	{
-		return session("ram_quota=4K, base=0x%p, size=0x%lx, wc=%s",
+		return session("ram_quota=6K, base=0x%p, size=0x%lx, wc=%s",
 		               base, size, write_combined ? "yes" : "no");
 	}
 
diff --git a/repos/base/include/io_port_session/connection.h b/repos/base/include/io_port_session/connection.h
index 1a2af2edf2..31eaf1749e 100644
--- a/repos/base/include/io_port_session/connection.h
+++ b/repos/base/include/io_port_session/connection.h
@@ -30,7 +30,7 @@ struct Genode::Io_port_connection : Connection<Io_port_session>,
 	 */
 	Capability<Io_port_session> _session(Parent &parent, unsigned base, unsigned size)
 	{
-		return session(parent, "ram_quota=4K, io_port_base=%u, io_port_size=%u",
+		return session(parent, "ram_quota=6K, io_port_base=%u, io_port_size=%u",
 		               base, size);
 	}
 
diff --git a/repos/base/include/irq_session/connection.h b/repos/base/include/irq_session/connection.h
index 3c961ac6a1..4a8cf21c02 100644
--- a/repos/base/include/irq_session/connection.h
+++ b/repos/base/include/irq_session/connection.h
@@ -32,7 +32,7 @@ struct Genode::Irq_connection : Connection<Irq_session>, Irq_session_client
 	                                 Irq_session::Polarity polarity,
 	                                 Genode::addr_t        device_config_phys)
 	{
-		return session("ram_quota=4K, irq_number=%u, irq_trigger=%u, "
+		return session("ram_quota=6K, irq_number=%u, irq_trigger=%u, "
 		               " irq_polarity=%u, device_config_phys=0x%lx",
 		               irq, trigger, polarity, device_config_phys);
 	}
diff --git a/repos/base/include/parent/parent.h b/repos/base/include/parent/parent.h
index 76c20c2d59..9e598d4d47 100644
--- a/repos/base/include/parent/parent.h
+++ b/repos/base/include/parent/parent.h
@@ -183,6 +183,8 @@ class Genode::Parent
 		 * Request session capability
 		 *
 		 * \throw Service_denied
+		 * \throw Quota_exceeded   session quota does not suffice for
+		 *                         the creation of the new session
 		 *
 		 * In the exception case, the parent implicitly closes the session.
 		 */
@@ -215,7 +217,7 @@ class Genode::Parent
 		 * Interface for providing services
 		 */
 
-		enum Session_response { SESSION_OK, SESSION_CLOSED, INVALID_ARGS };
+		enum Session_response { SESSION_OK, SESSION_CLOSED, INVALID_ARGS, QUOTA_EXCEEDED };
 
 		/**
 		 * Set state of a session provided by the child service
diff --git a/repos/base/include/rom_session/connection.h b/repos/base/include/rom_session/connection.h
index 2eed9c43cf..0dd66f0d91 100644
--- a/repos/base/include/rom_session/connection.h
+++ b/repos/base/include/rom_session/connection.h
@@ -28,7 +28,7 @@ class Genode::Rom_connection : public Connection<Rom_session>,
 
 		class Rom_connection_failed : public Parent::Exception { };
 
-		enum { RAM_QUOTA = 4096UL };
+		enum { RAM_QUOTA = 6*1024UL };
 
 	private:
 
diff --git a/repos/base/include/root/component.h b/repos/base/include/root/component.h
index d3041cf4e9..81ef7d2d4f 100644
--- a/repos/base/include/root/component.h
+++ b/repos/base/include/root/component.h
@@ -130,8 +130,9 @@ class Genode::Root_component : public Rpc_object<Typed_root<SESSION_TYPE> >,
 			size_t needed = sizeof(SESSION_TYPE) + md_alloc()->overhead(sizeof(SESSION_TYPE));
 
 			if (needed > ram_quota) {
-				error("insufficient ram quota, provided=", ram_quota,
-				      ", required=", needed);
+				warning("insufficient ram quota "
+				        "for ", SESSION_TYPE::service_name(), " session, "
+				        "provided=", ram_quota, ", required=", needed);
 				throw Root::Quota_exceeded();
 			}
 
@@ -269,6 +270,7 @@ class Genode::Root_component : public Rpc_object<Typed_root<SESSION_TYPE> >,
 		{
 			try {
 				return _create(args, affinity); }
+			catch (Root::Quota_exceeded) { throw Service::Quota_exceeded(); }
 			catch (...) {
 				throw typename Local_service<SESSION_TYPE>::Factory::Denied(); }
 		}
diff --git a/repos/base/include/trace_session/connection.h b/repos/base/include/trace_session/connection.h
index e8d14b1848..233b40cd3b 100644
--- a/repos/base/include/trace_session/connection.h
+++ b/repos/base/include/trace_session/connection.h
@@ -35,7 +35,7 @@ struct Genode::Trace::Connection : Genode::Connection<Genode::Trace::Session>,
 	{
 		return session(parent,
 		               "ram_quota=%lu, arg_buffer_size=%lu, parent_levels=%u",
-		               ram_quota, arg_buffer_size, parent_levels);
+		               ram_quota + 2048, arg_buffer_size, parent_levels);
 	}
 
 	/**
diff --git a/repos/base/src/core/main.cc b/repos/base/src/core/main.cc
index 1ba2580ed1..fa4d9724b4 100644
--- a/repos/base/src/core/main.cc
+++ b/repos/base/src/core/main.cc
@@ -189,6 +189,8 @@ class Core_child : public Child_policy
 
 		Ram_session           &ref_ram()           { return _core_ram; }
 		Ram_session_capability ref_ram_cap() const { return _core_ram_cap; }
+
+		size_t session_alloc_batch_size() const override { return 128; }
 };
 
 
diff --git a/repos/base/src/include/base/internal/expanding_parent_client.h b/repos/base/src/include/base/internal/expanding_parent_client.h
index 6ef975c2fe..c347513887 100644
--- a/repos/base/src/include/base/internal/expanding_parent_client.h
+++ b/repos/base/src/include/base/internal/expanding_parent_client.h
@@ -92,27 +92,7 @@ class Genode::Expanding_parent_client : public Parent_client
 		                           Session_args const &args,
 		                           Affinity     const &affinity) override
 		{
-			enum { NUM_ATTEMPTS = 2 };
-			return retry<Parent::Quota_exceeded>(
-				[&] () { return Parent_client::session(id, name, args, affinity); },
-				[&] () {
-
-					/*
-					 * Request amount of session quota from the parent.
-					 *
-					 * XXX We could deduce the available quota of our
-					 *     own RAM session from the request.
-					 */
-					size_t const ram_quota =
-						Arg_string::find_arg(args.string(), "ram_quota")
-							.ulong_value(0);
-
-					char buf[128];
-					snprintf(buf, sizeof(buf), "ram_quota=%lu", ram_quota);
-
-					resource_request(Resource_args(buf));
-				},
-				NUM_ATTEMPTS);
+			return Parent_client::session(id, name, args, affinity);
 		}
 
 		Upgrade_result upgrade(Client::Id id, Upgrade_args const &args) override
diff --git a/repos/base/src/lib/base/child.cc b/repos/base/src/lib/base/child.cc
index 4dc2052ea9..d9351af9c0 100644
--- a/repos/base/src/lib/base/child.cc
+++ b/repos/base/src/lib/base/child.cc
@@ -142,9 +142,15 @@ void Child::session_sigh(Signal_context_capability sigh)
 	 * needs asynchronous handling.
 	 */
 	_id_space.for_each<Session_state const>([&] (Session_state const &session) {
-		if (session.phase == Session_state::AVAILABLE
-		 && sigh.valid() && session.async_client_notify)
-			Signal_transmitter(sigh).submit(); });
+
+		if (session.phase == Session_state::AVAILABLE ||
+		    session.phase == Session_state::QUOTA_EXCEEDED ||
+		    session.phase == Session_state::INVALID_ARGS) {
+
+			if (sigh.valid() && session.async_client_notify)
+				Signal_transmitter(sigh).submit();
+		}
+	});
 }
 
 
@@ -164,6 +170,10 @@ create_session(Child_policy::Name const &child_name, Service &service,
 	try {
 		return service.create_session(factory, id_space, id, label, args, affinity);
 	}
+	catch (Service::Quota_exceeded) {
+		error(child_name, " requested session with insufficient session quota");
+		throw Parent::Quota_exceeded();
+	}
 	catch (Allocator::Out_of_memory) {
 		error("could not allocate session meta data for child ", child_name);
 		throw Parent::Quota_exceeded();
@@ -230,12 +240,27 @@ Session_capability Child::session(Parent::Client::Id id,
 	/* filter session affinity */
 	Affinity const filtered_affinity = _policy.filter_session_affinity(affinity);
 
+	size_t const ram_quota = Arg_string::find_arg(argbuf, "ram_quota").ulong_value(0);
+
+	/* portion of quota to keep for ourself to maintain the session meta data */
+	size_t const keep_ram_quota = _session_factory.session_costs();
+
+	if (ram_quota < keep_ram_quota)
+		throw Parent::Quota_exceeded();
+
+	/* ram quota to be forwarded to the server */
+	size_t const forward_ram_quota = ram_quota - keep_ram_quota;
+
+	/* adjust the session information as presented to the server */
+	Arg_string::set_arg(argbuf, sizeof(argbuf), "ram_quota",
+	                    forward_ram_quota);
+
 	/* may throw a 'Parent::Service_denied' exception */
 	Child_policy::Route route = _resolve_session_request(_policy, name.string(), argbuf);
 	Service &service = route.service;
 
 	Session_state &session =
-		create_session(_policy.name(), service, route.label, *_session_factory,
+		create_session(_policy.name(), service, route.label, _session_factory,
 		               _id_space, id, argbuf, filtered_affinity);
 
 	_policy.session_state_changed();
@@ -243,14 +268,12 @@ Session_capability Child::session(Parent::Client::Id id,
 	session.ready_callback = this;
 	session.closed_callback = this;
 
-	/* transfer the quota donation from the child's account to ourself */
-	size_t ram_quota = Arg_string::find_arg(argbuf, "ram_quota").ulong_value(0);
-
 	try {
+		/* transfer the quota donation from the child's account to ourself */
 		Transfer donation_from_child(ram_quota, _ram.cap(), _policy.ref_ram_cap());
 
 		/* transfer session quota from ourself to the service provider */
-		Transfer donation_to_service(ram_quota, _policy.ref_ram_cap(),
+		Transfer donation_to_service(forward_ram_quota, _policy.ref_ram_cap(),
 		                             service.ram());
 
 		/* try to dispatch session request synchronously */
@@ -261,6 +284,11 @@ Session_capability Child::session(Parent::Client::Id id,
 			throw Service_denied();
 		}
 
+		if (session.phase == Session_state::QUOTA_EXCEEDED) {
+			_revert_quota_and_destroy(session);
+			throw Parent::Quota_exceeded();
+		}
+
 		/* finish transaction */
 		donation_from_child.acknowledge();
 		donation_to_service.acknowledge();
@@ -298,7 +326,10 @@ Session_capability Child::session_cap(Client::Id id)
 
 	auto lamda = [&] (Session_state &session) {
 
-		if (session.phase == Session_state::INVALID_ARGS) {
+		if (session.phase == Session_state::INVALID_ARGS
+		 || session.phase == Session_state::QUOTA_EXCEEDED) {
+
+			Session_state::Phase const phase = session.phase;
 
 			/*
 			 * Implicity discard the session request when delivering an
@@ -306,7 +337,11 @@ Session_capability Child::session_cap(Client::Id id)
 			 * of the session ID at the child anyway.
 			 */
 			_revert_quota_and_destroy(session);
-			throw Parent::Service_denied();
+
+			if (phase == Session_state::INVALID_ARGS)
+				throw Parent::Service_denied();
+			else
+				throw Parent::Quota_exceeded();
 		}
 
 		if (!session.alive())
@@ -390,8 +425,14 @@ void Child::_revert_quota_and_destroy(Session_state &session)
 		Transfer donation_from_service(session.donated_ram_quota(),
 		                               session.service().ram(), _policy.ref_ram_cap());
 
-		/* transfer session quota from ourself to the client (our child) */
-		Transfer donation_to_client(session.donated_ram_quota(),
+		/*
+		 * Transfer session quota from ourself to the client (our child). In
+		 * addition to the quota returned from the server, we also return the
+		 * quota that we preserved for locally storing the session meta data
+		 * ('session_costs').
+		 */
+		Transfer donation_to_client(session.donated_ram_quota() +
+		                            _session_factory.session_costs(),
 		                            _policy.ref_ram_cap(), ram_session_cap());
 		/* finish transaction */
 		donation_from_service.acknowledge();
@@ -411,7 +452,8 @@ Child::Close_result Child::_close(Session_state &session)
 	 * If session could not be established, destruct session immediately
 	 * without involving the server
 	 */
-	if (session.phase == Session_state::INVALID_ARGS) {
+	if (session.phase == Session_state::INVALID_ARGS
+	 || session.phase == Session_state::QUOTA_EXCEEDED) {
 		_revert_quota_and_destroy(session);
 		return CLOSE_DONE;
 	}
@@ -501,6 +543,12 @@ void Child::session_response(Server::Id id, Session_response response)
 					session.ready_callback->session_ready(session);
 				break;
 
+			case Parent::QUOTA_EXCEEDED:
+				session.phase = Session_state::QUOTA_EXCEEDED;
+				if (session.ready_callback)
+					session.ready_callback->session_ready(session);
+				break;
+
 			case Parent::SESSION_OK:
 				if (session.phase == Session_state::UPGRADE_REQUESTED) {
 					session.phase = Session_state::CAP_HANDED_OUT;
@@ -638,9 +686,6 @@ void Child::_try_construct_env_dependent_members()
 	_policy.init(_cpu.session(), _cpu.cap());
 	_policy.init(_pd.session(),  _pd.cap());
 
-	_heap.construct(&_ram.session(), &_local_rm);
-	_session_factory.construct(*_heap);
-
 	try {
 		_initial_thread.construct(_cpu.session(), _pd.cap(), "initial");
 		_process.construct(_binary.session().dataspace(), _linker_dataspace(),
@@ -733,13 +778,9 @@ Child::~Child()
 
 	/*
 	 * Make sure to destroy the users of the child's environment sessions
-	 * before destructing those sessions. E.g., as the environment RAM session
-	 * provides the backing store for the '_heap', we must not destroy the heap
-	 * after the RAM session.
+	 * before destructing those sessions.
 	 */
 	_process.destruct();
 	_initial_thread.destruct();
-	_session_factory.destruct();
-	_heap.destruct();
 }
 
diff --git a/repos/base/src/lib/base/component.cc b/repos/base/src/lib/base/component.cc
index afc190547e..0e0b7dff4a 100644
--- a/repos/base/src/lib/base/component.cc
+++ b/repos/base/src/lib/base/component.cc
@@ -13,6 +13,7 @@
  */
 
 /* Genode includes */
+#include <util/retry.h>
 #include <base/component.h>
 #include <base/connection.h>
 #include <base/service.h>
@@ -108,12 +109,64 @@ namespace {
 		{
 			Lock::Guard guard(_lock);
 
-			Session_capability cap = _parent.session(id, name, args, affinity);
-			if (cap.valid())
-				return cap;
+			/*
+			 * Since we account for the backing store for session meta data on
+			 * the route between client and server, the session quota provided
+			 * by the client may become successively diminished by intermediate
+			 * components, prompting the server to deny the session request.
+			 *
+			 * If the session creation failed due to insufficient session
+			 * quota, we try to repeatedly increase the quota up to
+			 * 'NUM_ATTEMPTS'.
+			 */
+			enum { NUM_ATTEMPTS = 10 };
 
-			_block_for_session();
-			return _parent.session_cap(id);
+			/* extract session quota as specified by the 'Connection' */
+			char argbuf[Parent::Session_args::MAX_SIZE];
+			strncpy(argbuf, args.string(), sizeof(argbuf));
+			size_t ram_quota = Arg_string::find_arg(argbuf, "ram_quota").ulong_value(0);
+
+			return retry<Parent::Quota_exceeded>([&] () {
+
+				Arg_string::set_arg(argbuf, sizeof(argbuf), "ram_quota",
+				                    String<32>(Number_of_bytes(ram_quota)).string());
+
+				Session_capability cap =
+					_parent.session(id, name, Parent::Session_args(argbuf), affinity);
+
+				if (cap.valid())
+					return cap;
+
+				_block_for_session();
+				return _parent.session_cap(id);
+			},
+			[&] () {
+					/*
+					 * If our RAM session has less quota available than the
+					 * session quota, the session-quota transfer failed. In
+					 * this case, we try to recover by issuing a resource
+					 * request to the parent.
+					 *
+					 * Otherwise, the session-quota transfer succeeded but
+					 * the request was denied by the server.
+					 */
+					if (ram_quota > ram().avail()) {
+
+						/* issue resource request */
+						char buf[128];
+						snprintf(buf, sizeof(buf), "ram_quota=%lu", ram_quota);
+
+						_parent.resource_request(Parent::Resource_args(buf));
+					} else {
+						ram_quota += 4096;
+					}
+
+			}, NUM_ATTEMPTS);
+
+			warning("giving up to increase session quota for ", name.string(), " session "
+			        "after ", (int)NUM_ATTEMPTS, " attempts");
+
+			throw Parent::Quota_exceeded();
 		}
 
 		void upgrade(Parent::Client::Id id, Parent::Upgrade_args const &args) override
diff --git a/repos/base/src/lib/base/root_proxy.cc b/repos/base/src/lib/base/root_proxy.cc
index 23472ab720..78d485bd72 100644
--- a/repos/base/src/lib/base/root_proxy.cc
+++ b/repos/base/src/lib/base/root_proxy.cc
@@ -186,7 +186,7 @@ void Root_proxy::_handle_session_request(Xml_node request)
 		catch (Root::Invalid_args) {
 			_env.parent().session_response(id, Parent::INVALID_ARGS); }
 		catch (Root::Quota_exceeded) {
-			_env.parent().session_response(id, Parent::INVALID_ARGS); }
+			_env.parent().session_response(id, Parent::QUOTA_EXCEEDED); }
 		catch (Root::Unavailable) {
 			_env.parent().session_response(id, Parent::INVALID_ARGS); }
 	}
diff --git a/repos/base/src/lib/base/session_state.cc b/repos/base/src/lib/base/session_state.cc
index 330335285f..3d31e91113 100644
--- a/repos/base/src/lib/base/session_state.cc
+++ b/repos/base/src/lib/base/session_state.cc
@@ -32,6 +32,7 @@ struct Formatted_phase
 		switch (_phase) {
 		case State::CREATE_REQUESTED:   print(output, "CREATE_REQUESTED");  break;
 		case State::INVALID_ARGS:       print(output, "INVALID_ARGS");      break;
+		case State::QUOTA_EXCEEDED:     print(output, "QUOTA_EXCEEDED");    break;
 		case State::AVAILABLE:          print(output, "AVAILABLE");         break;
 		case State::CAP_HANDED_OUT:     print(output, "CAP_HANDED_OUT");    break;
 		case State::UPGRADE_REQUESTED:  print(output, "UPGRADE_REQUESTED"); break;
@@ -86,6 +87,7 @@ void Session_state::generate_session_request(Xml_generator &xml) const
 		break;
 
 	case INVALID_ARGS:
+	case QUOTA_EXCEEDED:
 	case AVAILABLE:
 	case CAP_HANDED_OUT:
 	case CLOSED:
diff --git a/repos/demo/include/launchpad/launchpad.h b/repos/demo/include/launchpad/launchpad.h
index 6195847844..f424b2065a 100644
--- a/repos/demo/include/launchpad/launchpad.h
+++ b/repos/demo/include/launchpad/launchpad.h
@@ -51,6 +51,8 @@ class Launchpad_child : public Genode::Child_policy,
 
 		Genode::Env &_env;
 
+		Genode::Allocator &_alloc;
+
 		Genode::Ram_session_capability _ref_ram_cap;
 		Genode::Ram_session_client     _ref_ram { _ref_ram_cap };
 		Genode::size_t           const _ram_quota;
@@ -88,6 +90,7 @@ class Launchpad_child : public Genode::Child_policy,
 	public:
 
 		Launchpad_child(Genode::Env                 &env,
+		                Genode::Allocator           &alloc,
 		                Genode::Session_label const &label,
 		                Binary_name           const &elf_name,
 		                Genode::size_t               ram_quota,
@@ -96,7 +99,8 @@ class Launchpad_child : public Genode::Child_policy,
 		                Genode::Dataspace_capability config_ds)
 		:
 			_name(label), _elf_name(elf_name),
-			_env(env), _ref_ram_cap(env.ram_session_cap()), _ram_quota(ram_quota),
+			_env(env), _alloc(alloc),
+			_ref_ram_cap(env.ram_session_cap()), _ram_quota(ram_quota),
 			_parent_services(parent_services),
 			_child_services(child_services),
 			_session_requester(env.ep().rpc_ep(), _env.ram(), _env.rm()),
@@ -112,7 +116,7 @@ class Launchpad_child : public Genode::Child_policy,
 			_child_services.for_each(
 				[&] (Child_service &service) {
 					if (service.has_id_space(_session_requester.id_space()))
-						Genode::destroy(_child.heap(), &service); });
+						Genode::destroy(_alloc, &service); });
 		}
 
 
@@ -188,7 +192,7 @@ class Launchpad_child : public Genode::Child_policy,
 				return;
 			}
 
-			new (_child.heap())
+			new (_alloc)
 				Child_service(_child_services, _session_requester.id_space(),
 				              _child.session_factory(), service_name,
 				              _child.ram_session_cap(), *this);
diff --git a/repos/demo/src/lib/launchpad/launchpad.cc b/repos/demo/src/lib/launchpad/launchpad.cc
index e3d4356a44..d1c7a14073 100644
--- a/repos/demo/src/lib/launchpad/launchpad.cc
+++ b/repos/demo/src/lib/launchpad/launchpad.cc
@@ -154,7 +154,15 @@ Launchpad_child *Launchpad::start_child(Launchpad_child::Name const &binary_name
 
 	if (ram_quota > _env.ram().avail()) {
 		error("child's ram quota is higher than our available quota, using available quota");
-		ram_quota = _env.ram().avail() - 256*1000;
+
+		size_t const avail     = _env.ram().avail();
+		size_t const preserved = 256*1024;
+
+		if (avail < preserved) {
+			error("giving up, our own quota is too low (", avail, ")");
+			return 0;
+		}
+		ram_quota = avail - preserved;
 	}
 
 	size_t metadata_size = 4096*16 + sizeof(Launchpad_child);
@@ -168,7 +176,7 @@ Launchpad_child *Launchpad::start_child(Launchpad_child::Name const &binary_name
 
 	try {
 		Launchpad_child *c = new (&_sliced_heap)
-			Launchpad_child(_env, unique_name, binary_name, ram_quota,
+			Launchpad_child(_env, _heap, unique_name, binary_name, ram_quota,
 			                _parent_services, _child_services, config_ds);
 
 		Lock::Guard lock_guard(_children_lock);
diff --git a/repos/hello_tutorial/include/hello_session/connection.h b/repos/hello_tutorial/include/hello_session/connection.h
index dffb9a3934..cce2b502fb 100644
--- a/repos/hello_tutorial/include/hello_session/connection.h
+++ b/repos/hello_tutorial/include/hello_session/connection.h
@@ -26,7 +26,7 @@ struct Hello::Connection : Genode::Connection<Session>, Session_client
 	:
 		/* create session */
 		Genode::Connection<Hello::Session>(env, session(env.parent(),
-		                                                "ram_quota=4K")),
+		                                                "ram_quota=6K")),
 
 		/* initialize RPC interface */
 		Session_client(cap()) { }
diff --git a/repos/os/include/audio_in_session/connection.h b/repos/os/include/audio_in_session/connection.h
index 3977be6291..dbde2e0fb9 100644
--- a/repos/os/include/audio_in_session/connection.h
+++ b/repos/os/include/audio_in_session/connection.h
@@ -31,7 +31,7 @@ struct Audio_in::Connection : Genode::Connection<Session>, Audio_in::Session_cli
 	Capability<Audio_in::Session> _session(Genode::Parent &parent, char const *channel)
 	{
 		return session(parent, "ram_quota=%ld, channel=\"%s\"",
-		               2*4096 + sizeof(Stream), channel);
+		               10*1024 + sizeof(Stream), channel);
 	}
 
 	/**
diff --git a/repos/os/include/audio_out_session/connection.h b/repos/os/include/audio_out_session/connection.h
index e12df105b5..ca3a2b298c 100644
--- a/repos/os/include/audio_out_session/connection.h
+++ b/repos/os/include/audio_out_session/connection.h
@@ -31,7 +31,7 @@ struct Audio_out::Connection : Genode::Connection<Session>, Audio_out::Session_c
 	Capability<Audio_out::Session> _session(Genode::Parent &parent, char const *channel)
 	{
 		return session(parent, "ram_quota=%ld, channel=\"%s\"",
-		               2*4096 + sizeof(Stream), channel);
+		               2*4096 + 2048 + sizeof(Stream), channel);
 	}
 
 	/**
diff --git a/repos/os/include/block_session/connection.h b/repos/os/include/block_session/connection.h
index 2713e2ae20..d821968949 100644
--- a/repos/os/include/block_session/connection.h
+++ b/repos/os/include/block_session/connection.h
@@ -31,7 +31,7 @@ struct Block::Connection : Genode::Connection<Session>, Session_client
 	                                    char const *label, Genode::size_t tx_buf_size)
 	{
 		return session(parent, "ram_quota=%ld, tx_buf_size=%ld, label=\"%s\"",
-		               3*4096 + tx_buf_size, tx_buf_size, label);
+		               14*1024 + tx_buf_size, tx_buf_size, label);
 	}
 
 	/**
diff --git a/repos/os/include/init/child.h b/repos/os/include/init/child.h
index 1dc75e7b3d..d9639207fe 100644
--- a/repos/os/include/init/child.h
+++ b/repos/os/include/init/child.h
@@ -339,6 +339,8 @@ class Init::Child : Child_policy, Child_service::Wakeup
 
 		Env &_env;
 
+		Allocator &_alloc;
+
 		Verbose const &_verbose;
 
 		Id const _id;
@@ -424,9 +426,7 @@ class Init::Child : Child_policy, Child_service::Wakeup
 
 				/*
 				 * If the configured RAM quota exceeds our own quota, we donate
-				 * all remaining quota to the child but we need to count in
-				 * our allocation of the child meta data from the heap.
-				 * Hence, we preserve some of our own quota.
+				 * all remaining quota to the child.
 				 */
 				if (ram_quota > ram_avail) {
 					ram_quota = ram_avail;
@@ -506,12 +506,18 @@ class Init::Child : Child_policy, Child_service::Wakeup
 		/**
 		 * Constructor
 		 *
+		 * \param alloc  allocator solely used for configuration-dependent
+		 *               allocations. It is not used for allocations on behalf
+		 *               of the child's behavior.
+		 *
+		 *
 		 * \throw Ram_session::Alloc_failed  allocation of config buffer failed
 		 * \throw Region_map::Attach_failed  failed to temporarily attach
 		 *                                   config dataspace to local address
 		 *                                   space
 		 */
 		Child(Env                      &env,
+		      Allocator                &alloc,
 		      Verbose            const &verbose,
 		      Id                        id,
 		      Report_update_trigger    &report_update_trigger,
@@ -523,7 +529,7 @@ class Init::Child : Child_policy, Child_service::Wakeup
 		      Registry<Parent_service> &parent_services,
 		      Registry<Routed_service> &child_services)
 		:
-			_env(env), _verbose(verbose), _id(id),
+			_env(env), _alloc(alloc), _verbose(verbose), _id(id),
 			_report_update_trigger(report_update_trigger),
 			_list_element(this),
 			_start_node(start_node),
@@ -567,24 +573,21 @@ class Init::Child : Child_policy, Child_service::Wakeup
 					if (_verbose.enabled())
 						log("  provides service ", Cstring(name));
 
-					new (_child.heap())
+					new (_alloc)
 						Routed_service(child_services, this->name(),
 						               _session_requester.id_space(),
 						               _child.session_factory(),
 						               name, _child.ram_session_cap(), *this);
-
 				}
 			}
 			catch (Xml_node::Nonexistent_sub_node) { }
-			catch (Genode::Child::Inactive) {
-				error(this->name(), ": incomplete environment at construction time"); }
 		}
 
 		virtual ~Child()
 		{
 			_child_services.for_each([&] (Routed_service &service) {
 				if (service.has_id_space(_session_requester.id_space()))
-					destroy(_child.heap(), &service); });
+					destroy(_alloc, &service); });
 		}
 
 		/**
diff --git a/repos/os/include/input_session/connection.h b/repos/os/include/input_session/connection.h
index c395f593cc..d7982d7641 100644
--- a/repos/os/include/input_session/connection.h
+++ b/repos/os/include/input_session/connection.h
@@ -27,7 +27,7 @@ struct Input::Connection : Genode::Connection<Session>, Session_client
 	 * \noapi
 	 */
 	Capability<Input::Session> _session(Genode::Parent &parent, char const *label) {
-		return session(parent, "ram_quota=16K, label=\"%s\"", label); }
+		return session(parent, "ram_quota=18K, label=\"%s\"", label); }
 
 	/**
 	 * Constructor
@@ -48,7 +48,7 @@ struct Input::Connection : Genode::Connection<Session>, Session_client
 	Connection() __attribute__((deprecated))
 	:
 		Genode::Connection<Input::Session>(
-			session(*Genode::env_deprecated()->parent(), "ram_quota=16K")),
+			session(*Genode::env_deprecated()->parent(), "ram_quota=18K")),
 		Session_client(*Genode::env_deprecated()->rm_session(), cap())
 	{ }
 };
diff --git a/repos/os/include/os/child_policy_dynamic_rom.h b/repos/os/include/os/child_policy_dynamic_rom.h
index 7790a6232f..c957236b59 100644
--- a/repos/os/include/os/child_policy_dynamic_rom.h
+++ b/repos/os/include/os/child_policy_dynamic_rom.h
@@ -194,6 +194,7 @@ class Genode::Child_policy_dynamic_rom_file : public Rpc_object<Rom_session>,
 				break;
 
 			case Session_state::INVALID_ARGS:
+			case Session_state::QUOTA_EXCEEDED:
 			case Session_state::AVAILABLE:
 			case Session_state::CAP_HANDED_OUT:
 			case Session_state::CLOSED:
diff --git a/repos/os/include/os/slave.h b/repos/os/include/os/slave.h
index 29662a2fe4..a48181eacb 100644
--- a/repos/os/include/os/slave.h
+++ b/repos/os/include/os/slave.h
@@ -213,6 +213,7 @@ class Genode::Slave::Connection_base
 					break;
 
 				case Session_state::INVALID_ARGS:
+				case Session_state::QUOTA_EXCEEDED:
 				case Session_state::AVAILABLE:
 				case Session_state::CAP_HANDED_OUT:
 				case Session_state::CLOSED:
diff --git a/repos/os/include/platform_session/connection.h b/repos/os/include/platform_session/connection.h
index f02780806d..ab7967d80d 100644
--- a/repos/os/include/platform_session/connection.h
+++ b/repos/os/include/platform_session/connection.h
@@ -27,7 +27,7 @@ struct Platform::Connection : Genode::Connection<Session>, Client
 	 * Constructor
 	 */
 	Connection(Genode::Env &env)
-	: Genode::Connection<Session>(env, session(env.parent(), "ram_quota=4K")),
+	: Genode::Connection<Session>(env, session(env.parent(), "ram_quota=6K")),
 	  Client(cap()) { }
 
 	/**
@@ -38,7 +38,7 @@ struct Platform::Connection : Genode::Connection<Session>, Client
 	 *              argument instead
 	 */
 	Connection() __attribute__((deprecated))
-	: Genode::Connection<Session>(session("ram_quota=4K")),
+	: Genode::Connection<Session>(session("ram_quota=6K")),
 	  Client(cap()) { }
 };
 
diff --git a/repos/os/include/report_session/connection.h b/repos/os/include/report_session/connection.h
index 1498a012e3..58b5198558 100644
--- a/repos/os/include/report_session/connection.h
+++ b/repos/os/include/report_session/connection.h
@@ -22,7 +22,7 @@ namespace Report { struct Connection; }
 
 struct Report::Connection : Genode::Connection<Session>, Session_client
 {
-	enum { RAM_QUOTA = 4*4096 }; /* value used for 'Slave::Connection' */
+	enum { RAM_QUOTA = 6*4096 }; /* value used for 'Slave::Connection' */
 
 	/**
 	 * Issue session request
@@ -33,7 +33,7 @@ struct Report::Connection : Genode::Connection<Session>, Session_client
 	                                     char const *label, size_t buffer_size)
 	{
 		return session(parent, "label=\"%s\", ram_quota=%ld, buffer_size=%zd",
-		               label, 2*4096 + buffer_size, buffer_size);
+		               label, 10*1024 + buffer_size, buffer_size);
 	}
 
 	/**
diff --git a/repos/os/include/rtc_session/connection.h b/repos/os/include/rtc_session/connection.h
index 4836f0cd83..6c1791ff44 100644
--- a/repos/os/include/rtc_session/connection.h
+++ b/repos/os/include/rtc_session/connection.h
@@ -28,7 +28,7 @@ struct Rtc::Connection : Genode::Connection<Session>, Session_client
 	 */
 	Connection(Genode::Env &env)
 	:
-		Genode::Connection<Rtc::Session>(env, session(env.parent(), "ram_quota=4K")),
+		Genode::Connection<Rtc::Session>(env, session(env.parent(), "ram_quota=8K")),
 		Session_client(cap())
 	{ }
 
@@ -41,7 +41,7 @@ struct Rtc::Connection : Genode::Connection<Session>, Session_client
 	 */
 	Connection() __attribute__((deprecated))
 	:
-		Genode::Connection<Rtc::Session>(session("ram_quota=4K")),
+		Genode::Connection<Rtc::Session>(session("ram_quota=8K")),
 		Session_client(cap())
 	{ }
 };
diff --git a/repos/os/include/terminal_session/connection.h b/repos/os/include/terminal_session/connection.h
index dd682e55e9..555ac13e1a 100644
--- a/repos/os/include/terminal_session/connection.h
+++ b/repos/os/include/terminal_session/connection.h
@@ -51,7 +51,7 @@ struct Terminal::Connection : Genode::Connection<Session>, Session_client
 	:
 		Genode::Connection<Session>(env, session(env.parent(),
 		                                         "ram_quota=%ld, label=\"%s\"",
-		                                         2*4096, label)),
+		                                         10*1024, label)),
 		Session_client(env.rm(), cap())
 	{
 		wait_for_connection(cap());
diff --git a/repos/os/include/timer_session/connection.h b/repos/os/include/timer_session/connection.h
index e7a81f3b49..b3aad1df8d 100644
--- a/repos/os/include/timer_session/connection.h
+++ b/repos/os/include/timer_session/connection.h
@@ -40,7 +40,7 @@ class Timer::Connection : public Genode::Connection<Session>, public Session_cli
 		 */
 		Connection(Genode::Env &env, char const *label = "")
 		:
-			Genode::Connection<Session>(env, session(env.parent(), "ram_quota=8K, label=\"%s\"", label)),
+			Genode::Connection<Session>(env, session(env.parent(), "ram_quota=10K, label=\"%s\"", label)),
 			Session_client(cap())
 		{
 			/* register default signal handler */
@@ -56,7 +56,7 @@ class Timer::Connection : public Genode::Connection<Session>, public Session_cli
 		 */
 		Connection() __attribute__((deprecated))
 		:
-			Genode::Connection<Session>(session("ram_quota=8K")),
+			Genode::Connection<Session>(session("ram_quota=10K")),
 			Session_client(cap())
 		{
 			/* register default signal handler */
diff --git a/repos/os/run/report_rom.run b/repos/os/run/report_rom.run
index 039bb4230b..871d4cf30c 100644
--- a/repos/os/run/report_rom.run
+++ b/repos/os/run/report_rom.run
@@ -70,7 +70,7 @@ compare_output_to {
 	[init -> test-report_rom] Reporter: start reporting (while the ROM client still listens)
 	[init -> test-report_rom] ROM client: wait for update notification
 	[init -> test-report_rom] ROM client: try to open the same report again
-	[init -> test-report_rom] Error: Report-session creation failed (label="brightness", ram_quota=12288, buffer_size=4096)
+	[init -> test-report_rom] Error: Report-session creation failed (label="brightness", ram_quota=14336, buffer_size=4096)
 	[init -> test-report_rom] ROM client: catched Parent::Service_denied - OK
 	[init -> test-report_rom] --- test-report_rom finished ---
 }
diff --git a/repos/os/src/init/main.cc b/repos/os/src/init/main.cc
index 985462415a..7f19d54b47 100644
--- a/repos/os/src/init/main.cc
+++ b/repos/os/src/init/main.cc
@@ -486,7 +486,7 @@ void Init::Main::_handle_config()
 
 			try {
 				_children.insert(new (_heap)
-				                 Init::Child(_env, *_verbose,
+				                 Init::Child(_env, _heap, *_verbose,
 				                             Init::Child::Id { ++_child_cnt },
 				                             _state_reporter,
 				                             start_node, default_route_node,