To convert existing tabs to spaces, press Edit->Blank Operations->TAB to Space.

If in the future you want to enter spaces instead of tab when you press tab key:

  1. Go to Settings->Preferences...->Language (since version 7.1) or Settings->Preferences...->Tab Settings (previous versions)
  2. Check Replace by space
  3. ( Optional ) You can set the number of spaces to use in place of a Tab by changing the Tab size field.

Screenshot of Replace by space