I found an answer to my question. It turned out this behavior is described
in the documentation for org-babel-expand-noweb-references:

"Note that any text preceding the <<foo>> construct on a line will be
interposed between the lines of the replacement text.  So for example if
<<foo>> is placed behind a comment, then the entire replacement text will
also be commented."

It is also documented in the manual
http://orgmode.org/manual/noweb.html#noweb in the "Noweb prefix lines"
section.

So, in my case the solution is to put the <<long-sql>> reference on the
next line:

#+begin_src R :session *R* :noweb yes
  result <- submit_query("
  <<long-sql>>")
#+end_src

It doesn't look as nice as before but it works.

Alex

On Wed, Sep 18, 2013 at 7:43 PM, Alexander Vorobiev <
alexander.vorobiev@gmail.com> wrote:

> Hi Tom,
>
> Unfortunately I can't have pure SQL output in my org files for two reasons:
>
> 1. The result set I am dealing with for this particular problem is about
> 20000 records
> 2. My SQL server (Netezza, "big data appliance") is not supported by
> Babel-SQL. I configured sql-mode to work with Netezza but session-based SQL
> is not supported by Babel either. I started adding support for SQL sessions
> to ob-sql.el and it kind of works but the results I am getting are
> inconsistent and only a small subset of header parameters is supported. Of
> course I haven't tested is with any other database. I can share what I've
> done if anybody is interested.
>
> Regards,
> Alex
>
>
> On Wed, Sep 18, 2013 at 5:27 PM, Thomas S. Dye <tsd@tsdye.com> wrote:
>
>> Aloha Alex,
>>
>> My work flow in this situation evaluates the SQL to create an Org-mode
>> table, which serves as input to the R source code block.
>>
>> For me, seeing the SQL output in a table is a sanity check.
>>
>> hth,
>> Tom
>>
>> Alexander Vorobiev <alexander.vorobiev@gmail.com> writes:
>>
>> > I have R code which submits SQL statements to a database server. Since
>> the
>> > SQL is rather complex, I want to put it into a separate code block in
>> order
>> > to have proper formatting, syntax highlighting, etc:
>> >
>> > #+name: long-sql
>> > #+begin_src sql
>> >     select *
>> >     from many, tables
>> >     where
>> >         complex_condition1 = 1,
>> >         complex_condition2 = 2
>> > #+end_src
>> >
>> > * Load the data to R session
>> > #+begin_src R :session *R* :noweb yes
>> >     result <- submit_query('<<long-sql>>')
>> > #+end_src
>> >
>> > Unfortunately, the R block doesn't work. When I open the file generated
>> by
>> > Babel, I see this:
>> >
>> > result <- submit_query('select *
>> > result <- submit_query('from many, tables
>> > etc
>> >
>> > instead of the one R submit_query call with my SQL statement as an
>> > argument. Is there anything I can do to achieve that?
>> >
>> > Thanks
>> > Alex
>> > I have R code which submits SQL statements to a database server. Since
>> > the SQL is rather complex, I want to put it into a separate code block
>> > in order to have proper formatting, syntax highlighting, etc:
>> >
>> > #+name: long-sql
>> > #+begin_src sql
>> > select *
>> > from many, tables
>> > where
>> > complex_condition1 = 1,
>> > complex_condition2 = 2
>> > #+end_src
>> >
>> > * Load the data to R session
>> > #+begin_src R :session *R* :noweb yes
>> > result <- submit_query('<<long-sql>>')
>> > #+end_src
>> >
>> > Unfortunately, the R block doesn't work. When I open the file
>> > generated by Babel, I see this:
>> >
>> > result <- submit_query('select *
>> > result <- submit_query('from many, tables
>> > etc
>> >
>> > instead of the one R submit_query call with my SQL statement as an
>> > argument. Is there anything I can do to achieve that?
>> >
>> > Thanks
>> > Alex
>> >
>> >
>>
>> --
>> Thomas S. Dye
>> http://www.tsdye.com
>>
>
>