diff --git a/clientapi/auth/authtypes/stages.go b/clientapi/auth/authtypes/stages.go
new file mode 100644
index 000000000..49024504c
--- /dev/null
+++ b/clientapi/auth/authtypes/stages.go
@@ -0,0 +1,19 @@
+// Copyright 2021 The Matrix.org Foundation C.I.C.
+//
+// Licensed under the Apache License, Version 2.0 (the "License");
+// you may not use this file except in compliance with the License.
+// You may obtain a copy of the License at
+//
+//     http://www.apache.org/licenses/LICENSE-2.0
+//
+// Unless required by applicable law or agreed to in writing, software
+// distributed under the License is distributed on an "AS IS" BASIS,
+// WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+// See the License for the specific language governing permissions and
+// limitations under the License.
+
+package authtypes
+
+const (
+	LoginStagePublicKeyNewSession = "m.login.publickey.newsession"
+)
diff --git a/clientapi/routing/register.go b/clientapi/routing/register.go
index 455bbf8cb..55bb0df87 100644
--- a/clientapi/routing/register.go
+++ b/clientapi/routing/register.go
@@ -750,8 +750,8 @@ func handleRegistrationFlow(
 		}
 	}
 
-	switch r.Auth.Type {
-	case authtypes.LoginTypeRecaptcha:
+	switch true {
+	case r.Auth.Type == authtypes.LoginTypeRecaptcha:
 		// Check given captcha response
 		resErr := validateRecaptcha(cfg, r.Auth.Response, req.RemoteAddr)
 		if resErr != nil {
@@ -761,24 +761,20 @@ func handleRegistrationFlow(
 		// Add Recaptcha to the list of completed registration stages
 		sessions.addCompletedSessionStage(sessionID, authtypes.LoginTypeRecaptcha)
 
-	case authtypes.LoginTypeDummy:
+	case r.Auth.Type == authtypes.LoginTypeDummy && !cfg.PasswordAuthenticationDisabled:
 		// there is nothing to do
 		// Add Dummy to the list of completed registration stages
 		sessions.addCompletedSessionStage(sessionID, authtypes.LoginTypeDummy)
 
-	case authtypes.LoginTypePublicKey:
-		isCompleted, authType, err := handlePublicKeyRegistration(cfg, reqBody, &r, userAPI)
+	case r.Auth.Type == authtypes.LoginTypePublicKey:
+		_, authType, err := handlePublicKeyRegistration(cfg, reqBody, &r, userAPI)
 		if err != nil {
 			return *err
 		}
 
-		if isCompleted {
-			sessions.addCompletedSessionStage(sessionID, authType)
-		} else {
-			newPublicKeyAuthSession(&r, sessions, sessionID)
-		}
+		sessions.addCompletedSessionStage(sessionID, authType)
 
-	case "":
+	case r.Auth.Type == "":
 		// An empty auth type means that we want to fetch the available
 		// flows. It can also mean that we want to register as an appservice
 		// but that is handed above.
diff --git a/clientapi/routing/register_publickey.go b/clientapi/routing/register_publickey.go
index 2ab2b6ca1..6132530d0 100644
--- a/clientapi/routing/register_publickey.go
+++ b/clientapi/routing/register_publickey.go
@@ -26,14 +26,6 @@ import (
 	"github.com/tidwall/gjson"
 )
 
-func newPublicKeyAuthSession(request *registerRequest, sessions *sessionsDict, sessionID string) {
-	sessions.sessions[sessionID] = append(sessions.sessions[sessionID], authtypes.LoginTypePublicKey)
-	// Public key auth does not use password. But the registration flow
-	// requires setting a password in order to create the account.
-	// Create a random password to satisfy the requirement.
-	request.Password = util.RandomString(sessionIDLength)
-}
-
 func handlePublicKeyRegistration(
 	cfg *config.ClientAPI,
 	reqBytes []byte,
@@ -67,7 +59,7 @@ func handlePublicKeyRegistration(
 		authHandler = pkEthHandler
 	default:
 		// No response. Client is asking for a new registration session
-		return false, "", nil
+		return false, authtypes.LoginStagePublicKeyNewSession, nil
 	}
 
 	if _, ok := sessions.sessions[authHandler.GetSession()]; !ok {
@@ -85,7 +77,7 @@ func handlePublicKeyRegistration(
 		}
 	}
 
-	isCompleted, jerr := authHandler.ValidateLoginResponse()
+	isValidated, jerr := authHandler.ValidateLoginResponse()
 	if jerr != nil {
 		return false, "", &util.JSONResponse{
 			Code: http.StatusUnauthorized,
@@ -93,5 +85,19 @@ func handlePublicKeyRegistration(
 		}
 	}
 
-	return isCompleted, authtypes.LoginType(authHandler.GetType()), nil
+	// Registration flow requires a password to
+	// create a user account. Create a random one
+	// to satisfy the requirement. This is not used
+	// for public key cryptography.
+	createPassword(r)
+
+	return isValidated, authtypes.LoginType(authHandler.GetType()), nil
+}
+
+func createPassword(request *registerRequest) {
+	// Public key auth does not use password.
+	// Create a random one that is never used.
+	// Login validation will be done using public / private
+	// key cryptography.
+	request.Password = util.RandomString(sessionIDLength)
 }