Importing tab based outline txt file into Word outline

Given a text file containing and outline with tabs to indent each level, I would like to import this into a Word 2007 document so that the each indentation level is converted to a H1, H2, etc heading level.

I tried copy pasting the text into the outline view and opening the text file via File, Open. Both did not give the expected result.

Level 1
    Level 2
        Level 3      
Level 1
    Level 2

Note: I am using spaces instead of tabs to indent this sample.

It's not obvious how to do this (I've tried for some time myself) but I stumbled on the answer today. Works for text outlines that are indented by tabs or by spaces. You can cut and paste the text or open the text file using the File-Open menu.

1. Select all the text using ctrl+a or by the Select All menu item. This highlights all the text.

2. Click on the Multilevel List icon (in the Paragraph section of the Home tab, it's the third icon next to the Bullets and Numbering icons. From the pop-up box, click on one of the icons that show Heading 1, Heading 2, etc. - these are lower in the box. This applies headings to the text.

3. Click on the View tab and then the Outline icon in the Documents Views section. You'll now see the text outline with the ability to expand/collapse each level.