Traditionally, only the maximally compact ground states are considered in the designability studies of the lattice proteins. We consider the consequences of inclusion of all clustered conformations as an extended set of the ground states. We calculated designabilities and performed folding simulations for 12-mers using traditional and extended ground state definitions. We show that the choice of compact conformations as the ground states may produce severe artifacts in designability and folding kinetics studies, even for such small model systems. The physically realistic concept of the clustered ground states allows to overcome these difficulties. (C) 2004 Elsevier B.V. All rights reserved.