commit 5dda212b3be3f1f12ad31e3d6543d367f987ee55
Author: Sebastian Gniazdowski <sgniazdowski@gmail.com>
Date:   Sat Dec 8 22:42:49 2018 +0100

    Instead of using termcap, 256-colours are based on zle_highlight entries
    
    Following code snippet performs the conversion of colour number to the
    code to be emitted to terminal (the example shows foreground color
    handling):
        ...
        strcpy(colseq_buf, fg_bg_sequences[fg_bg].start);
        ...
        } else if (colour > 7 && colour <= 255) {
            ptr += sprintf(ptr, "8;5;%d", colour);
        ...

diff --git a/Src/prompt.c b/Src/prompt.c
index 568bfc2a9..4a90f5fcf 100644
--- a/Src/prompt.c
+++ b/Src/prompt.c
@@ -1764,7 +1764,9 @@ output_colour(int colour, int fg_bg, int use_tc, int truecol, char *buf)
 	/* length of hex triplet always 7, don't need sprintf to count */
 	atrlen += buf ? sprintf(ptr, "#%02x%02x%02x", colour >> 16,
 		(colour >> 8) & 0xff, colour & 0xff) : 7;
-    /* colour should only be > 7 if using termcap but let's be safe */
+    /* colour should only be > 7 if using termcap but let's be safe
+     * update: currently other places in code don't always imply
+     * that colour > 7 => using-termcap */
     } else if (use_tc || colour > 7) {
 	char digbuf[DIGBUFSIZE];
 	sprintf(digbuf, "%d", colour);
@@ -2020,7 +2022,7 @@ set_colour_attribute(zattr atr, int fg_bg, int flags)
      * highlighting variables, so much of this shouldn't be
      * necessary at this point, but we might as well be safe.
      */
-    if (!def && !use_truecolor && (colour > 7 || use_termcap)) {
+    if (!def && !use_truecolor && (colour > 255 && use_termcap)) {
 	/*
 	 * We can if it's available, and either we couldn't get
 	 * the maximum number of colours, or the colour is in range.
@@ -2046,9 +2048,10 @@ set_colour_attribute(zattr atr, int fg_bg, int flags)
 	}
 	/*
 	 * Nope, that didn't work.
-	 * If 0 to 7, assume standard ANSI works, otherwise it won't.
+	 * If 0 to 7, assume standard ANSI works, if 8 to 255, assume
+         * standard 256-color escapes works, otherwise it won't.
 	 */
-	if (colour > 7)
+	if (colour > 255)
 	    return;
     }
 
@@ -2067,6 +2070,8 @@ set_colour_attribute(zattr atr, int fg_bg, int flags)
     } else if (use_truecolor) {
 	ptr += sprintf(ptr, "8;2;%d;%d;%d", colour >> 16,
 		(colour >> 8) & 0xff, colour & 0xff);
+    } else if (colour > 7 && colour <= 255) {
+        ptr += sprintf(ptr, "8;5;%d", colour);
     } else
 	*ptr++ = colour + '0';
     strcpy(ptr, fg_bg_sequences[fg_bg].end);