An adaptive high-fidelity perceptual subband encoder for spatially directional multichannel audio signals, using a mixture of individual-channel subband coding with subband-steered composite-channel signal coding that combines the spectral components of the individual channel subbands selected for steering. The composite channel representation includes a subband steering control signal which either conveys the levels of the spectral components from all the steered channels, or represents the apparent directions (net directional vectors) of the spectral components from all the steered channels.