diff --git a/mercurial/mdiff.py b/mercurial/mdiff.py
--- a/mercurial/mdiff.py
+++ b/mercurial/mdiff.py
@@ -7,6 +7,8 @@
 
 from __future__ import absolute_import
 
+import datetime
+import itertools
 import re
 import struct
 import zlib
@@ -525,3 +527,37 @@
 
 def replacediffheader(oldlen, newlen):
     return struct.pack(">lll", 0, oldlen, newlen)
+
+def prepare_mdiff(expected, output):
+    """Prepare the inputs for the mdiff.unidiff function"""
+    date1 = datetime.datetime.now().strftime("%a %b %d %y %H:%M:%S %Y %z")
+    date2 = date1
+    # join all the different elements into a single string
+    # to regenerate that file
+    exp = "".join(expected)
+    out = "".join(output)
+    opts = diffopts(noprefix=True)
+    return exp, date1, out, date2, opts
+
+def process_mdiff(uheaders, hunks):
+    """Process the output of mdiff into a list of lines,
+    to be used by getdiff"""
+    # the hunklines are in the hunks generator
+    # get the hunklines from the (hunkrange,hunklines) tuple
+    hunklines = [x[1] for x in hunks]
+    # extract and insert the headers at the beginnng of the hunklines list
+    headers = [uheaders[0].split("\t")[0]+"\n", uheaders[1].split("\t")[0]+"\n"]
+    hunklines.insert(0, headers)
+    difflines = itertools.chain.from_iterable(hunklines)
+    return difflines
+
+def new_diff(expected, output, ref, err):
+    """
+    The API of new_diff is designed to be same as difflib.unified_diff.
+    This is done for backwards compatibility and resuing existing code.
+    """
+    exp, date1, out, date2, opts = prepare_mdiff(expected, output)
+    uheaders, hunks = unidiff(exp, date1, out, date2,
+                            ref, err, binary=False, opts=opts)
+    difflines = process_mdiff(uheaders, hunks)
+    return difflines