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Conditional probability to predict sub-block significance improves the peak signal-to-noise ratio (PSNR) performance of a block-set wavelet image coder. Adaptive scanning of sub-blocks results in a further gain in PSNR performance. Together, the related algorithmic changes introduced by the authors result in competitive PSNR performance without the need for an arithmetic coding stage. As a consequence, timing tests reveal that the critical decoder computational complexity is reduced.