Strange problem with indenting PHP code

I spent hours last might trying to work out why a php page i was working on wasnt working and I have finally found out what seemed to be causing it this morning but I dont understand why it would do so.

Basically the page im working on it code taken from a book " learning PHP, MySQL, Javascript and CSS by O Reilly second edition." and it was " a practical example" on how to use PHP to connect to a MY SQL db, list out the records and also provide ability to add new records and delete current ones. I edited the code to reflect my own DB and spent hours trying to make it work but it simply gave me a error page (HTTP Error 500 (Internal Server Error):). I checked the code so many times for typos and errors and finally went to bed in the small hours of the morning. This morning I started a new and this time used a downloaded copy of the code from the authors website (I hand typed all the code first time), reedited it for my DB and it worked first time. That would suggest that I made an error in my code first time I thought. So I continued to add in the header and footer, div wrapper etc , all working fine and then finally to make it look nicer I thought I would indent all of the php code that talked to the DB . This is when I got the server error again - when indenting the code! I didnt change any code at all , just indented it one tab space and it breaks the whole page. I unindent it and it works again. How can this be?

Im using sublime text 2 - im now wondering if this is a bug or am i missing something?