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This study presents a novel approach to an Alamouti transmission scheme for hierarchical modulation (HM) with signal space diversity (SSD) in a Nakagami-m fading channel. The bit-error-rate (BER) performance of the proposed system is determined using the nearest neighbourhood (NN) approximation approach and is briefly discussed. In addition, a reduced complexity maximum likelihood-based decoder is proposed. Simulation results verify a significant BER improvement of the proposed system when compared with previously implemented schemes as well as the accuracy of the NN approximation and the proposed detector. Specifically, gains of up to 8 dB at a BER of 1 × 10-5 for both base and refinement bits have been observed when comparing the proposed HM SSD Alamouti scheme with an HM SSD scheme without Alamouti transmit diversity at a hierarchy of α = 4, channel conditions at m = 1 and N = 1 receiver antennas. Additional results for varying hierarchy at increasing number of receiver antennas and improving channel conditions is also presented. The performance of the proposed reduced complexity decoder is also presented as well as its complexity reduction analysed.