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Standard pan-sharpening methods do not allow control of the spatial and spectral quality of the fused image. The color distortion is also most significant problem in standard pan-sharpening methods. In this paper a novel hybrid pan sharpening method using contourlet transform is proposed which provides novel tradeoff solution between the spectral and spatial fidelity and preserves more detail spectral and spatial information. New hybrid image fusion rules are also proposed. Proposed method is applied on number of registered panchromatic and multispectral images and simulation results are compared with standard image fusion parameters. The simulation results of proposed method also compared with six different standard and recently proposed pan sharpening methods. It has been observed that simulation results of our proposed algorithm preserves more detailed spatial and spectral information and better visual quality compared to earlier reported methods.