I solve it by changing Copy key binding (that I never use by the way)
in  Edit->Keyboard Shortcuts->Edit
from Ctrl+C -- that was by default
to Ctrl+Alt+C (it can be anything, but not Ctrl+C)
Everything is working fine.

BTW broken Ctrl+C prevents emacs -nw from quiting with Ctrl-X-C
And that's _really_ annoying... Only kill-emacs is working.
Cheers!

-- 
 ctrl+c doesn't interrupt running process
https://bugs.launchpad.net/bugs/317948
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