out of memory crash in v1.6.1 multiplayer

Memory usage of the process grows rapidly; peaks at just under 1GB. fps of video refresh drops to a very low rate. Eventually minecraft crashes with OOM. Also happens in singleplayer. These are all worlds that were created on an older version of minecraft. The machine I use is quite powerful and has lots of RAM. I never had the issue on older versions up to and including 1.5.2.