A method of image compression comprises the steps of recursively transforming a image using a Discrete Wavelet Transform. This creates a plurality of levels including at least a first level, multiple intermediate levels, and a low-low pass subband of the last level. The transformed image at each level is quantized, and datapacking the quantized image is performed. The step of datapacking further includes, encoding of the first level using adaptive run length of zero cofficients; encoding of the intermediate levels using run-length coding of zero coefficients and a predetermined two-knob huffman table for non-zero coefficients and encoding of the low-low pass subband using a low frequency packing algorithm.