How do I set up Android Studio to work completely offline?

Question

I have very slow bandwidth, so I'm trying to keep all the required files on the local machine to work with Android Studio completely offline. When I click on "New Project" it always tries to download a file named gradle-1.6-bin.zip which I downloaded and tried to install locally via the plugin manager but it gives me an error:

fail to load plugin descriptor from file gradle-1.6-bin.zip

So what other files do I need to download and how do I install them properly to work offline with Android Studio?

Answer 1

Android Studio 0.4.0 now includes support for offline:

http://tools.android.com/recent/androidstudio040released

"You can now open the Compiler > Gradle options and enable Offline mode, which will tell Gradle to ignore update-to-date checks"

Updated Nov 2018: Now you can Open preferences, then search for "offline" and in the results select gradle and click "Offline work"