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We develop a new biologically motivated algorithm for representing natural images using successive projections into complementary subspaces. An image is first projected into an edge subspace spanned using an ICA basis adapted to natural images which captures the sharp features of an image like edges and curves. The residual image obtained after extraction of the sharp image features is approximated using a mixture of probabilistic principal component analyzers (MPPCA) model. The model is consistent with cellular, functional, information theoretic, and learning paradigms in visual pathway modeling. We demonstrate the efficiency of our model for representing different attributes of natural images like color and luminance. We compare the performance of our model in terms of quality of representation against commonly used basis, like the discrete cosine transform (DCT), independent component analysts (ICA), and principal components analysis (PCA), based on their entropies. Chrominance and luminance components of images are represented using codes having lower entropy than DCT, ICA, or PCA for similar visual quality. The model attains considerable simplification for learning from images by using a sparse independent code for representing edges and explicitly evaluating probabilities in the residual subspace.