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An efficient trellis-coded vector quantisation (TCVQ) algorithm based on the modified set partition method and partial distance search scheme is presented. Using the modified set partition method, the minimum distance within a subset can be maximised as much as possible, thus improving the performance of the TCVQ. A novel partial distance search method based on the codebook structure of TCVQ is also proposed to reduce the computational complexity of the minimum distortion encoding for TCVQ. Experimental results show that it can reduce the computational complexity by /spl sim/60-90% depending on the codebook size.