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We propose a new image restoration algorithm that is driven by an adaptive piecewise autoregressive model (PAR). The strength of the new algorithm is its ability to preserve spatial structures better than its predecessors. The high adaptability is achieved by locally fitting 2D image waveform to the PAR model in moving windows. The problem is posed as one of nonlinear least-square estimation of both PAR parameters and original pixels, constrained by the degradation function. Robust solutions of the underlying underdetermined inverse problem are obtained by an innovative use of multiple PAR models that circumvent the issue of model overfitting, and by applying a structured total least-square technique.