Methods of data encoding using trees formed with logic gates are described which lead to spatial compression of image data. Data encoding is achieved using a five-level wavelet transform, such as the Haar or the 2/10 transform. A dual transform engine is used, the first and engine being used for the first part of the first-level transform, the second part of the first-level transform and the subsequent-level transforms being performed by the second transform engine within a time interval which is less than or equal to the time taken by the first transform engine to effect the part-transform. Each bit plane of the resulting coefficients is then encoded by forming a tree structure from the bits and OR logical combinations thereof. Redundant data are removed from the resulting tree structure, and further data can be removed by using a predetermined compression profile. The resulting blocks of compressed data are of variable length and are packaged with sync words and index words for transmission so that the location and identity of the transformed data blocks can be determined from the received signal.