The purpose of the invention is to bridge the gap between parametric multi-channel audio coding and matrixed-surround multi-channel coding by gradually improving the sound of an up-mix signal while raising the bit-rate consumed by the side-information starting from 0 up to the bit-rates of the parametric methods. More specifically, it provides a method of flexibly choosing an "operating point" somewhere between matrixed-surround (no side-information, limited audio quality) and fully parametric reconstruction (full side-information rate required, good quality). This operating point can be chosen dynamically (i.e. varying over time) and in response to the permissible side-information rate, as it is dictated by the individual application.