Method and apparatus for motion compensated temporal interpolation of video sequences

Method for encoding a digital video stream, comprising the steps of encoding a video sequence into a full frame sequence, forming a decimated frame sequence by removing a predetermined number of frames from the full frame sequence by means of temporal decimation, locally decoding the full frame sequence, locally decoding the decimated frame sequence, temporally interpolating the decoded decimated frame sequence by means of an interpolator, comparing the locally decoded frames of the full frame sequence with the corresponding frames of the locally interpolated frame sequence, determining residual information for a frame based on at least the comparison for that frame, and providing an output stream comprising the decimated frame sequence and the determined residual information.