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This paper proposes a method for quality access control of gray scale digital images using lifting based DWT domain data hiding. The sign bit of the coefficients for high-high (HH) subband of different levels is protected using chaotic encryption. The coefficients in HH band are selected pseudo randomly using a secret key. A master key is then formed based on the keys that are used to generate the chaotic and the pseudorandom sequence. The master key is further encrypted using public key (P) cryptography to resist key estimation attack. The key is finally embedded as a watermark into the high-low (HL) and low-high (LH) subbands using quantization index modulation (QIM). The degree of degradation in the quality of the image mainly depends on the number of coefficients that are selected for encryption in the HH subband of different levels. If the encryption process is reverted completely using decryption process, the better quality of the images can be accessed. The simulation results have shown the validity of the claim.