A perceptually motivated spatial decomposition for two-channel stereo audio signals, capturing the information about the virtual sound stage, is proposed. The spatial decomposition allows to re-synthesize audio signals for playback over other sound systems than two-channel stereo. With the use of more front loudspeakers, the width of the virtual sound stage can be increased beyond +/- 30 DEG and the sweet spot region is extended. Optionally, lateral independent sound components can be played back separately over loudspeakers on the two sides of a listener to increase listener envelopment. It is also explained how the spatial decomposition can be used with surround sound and wavefield synthesis based audio system.; According to the main embodiment of the invention applying to multiple audio signals, it is proposed to generate multiple output audio signals (y1,..., yM) from multiple input audio signals (x1, ..., xL), in which the number of output is equal or higher than the number of input signals , this method comprising the steps of :; - by means of linear combinations of the input subbands X1(i), ..., XL(i), computing one or more independent sound subbands representing signal components which are independent between the input subbands, - by means of linear combinations of the input subbands X1(i), ..., XL(i), computing one or more localized direct sound subbands representing signal components which are contained in more than one of the input subbands and direction factors representing the ratios with which these signal components are contained in two or more input subbands, - generating the output subband signals, Y1(i)...YM(i), where each output subband signal is a linear combination of the independent sound subbands and the localized direct sound subbands - converting the output subband signals,Y1(i)...YM(i), to time domain audio signals, y1...yM.