The method of encoding divides the image into a number of blocks, which are then transformed (200), in accordance with a linear transform, into blocks of transform coefficients. The transform coefficients are rearranged (202) into a set of groups, wherein subsets of the groups of coefficients are capable of being inversed transformed to reproduce the image or a resolution thereof. The groups (203) are then encoded in turn. In the method of decoding, a user first selects a resolution mode and the method decodes (300) a predetermined number of groups in response to said resolution mode. The method then rearranges (301) the decoded groups to form blocks of transform coefficients, wherein the arrangement is determined in response to the resolution mode. The method then inverse transforms said rearrangement (303), if necessary, wherein the inverse transform is dependent on the resolution mode and combines the blocks of pixels to reconstitute the image or a resolution thereof.