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The paper presents a new method for image compression and hiding, based on decomposition with multi-layer general spectrum pyramid (GSP). The presented approach permits the insertion of one or more images between the consecutive decomposition layers. The additional information could be used for image authentication, for image contents protection or for providing additional confidential visual information to authorized users. In the paper the GSP decomposition is presented in brief the method ability to provide efficient hiding of significant amounts of visual information is evaluated.