In
SCJP book , page number 672 .. Its written ..A local class declared in a static method has access to only static method of the enclosing class, since there is no associated instance of the enclosing class. If inner class is in a static method then there is no " this " .So an inner class in a static method is subject to have same restrictions as the static method. In other words no access to instance variables .
Following is the code in which "this " is working, where it should not because the inner class is in the static method.