Abstract: Due to rapid development in the network and communication field, it has become necessary to protect the data 0during transmission. Digital watermarking is a solution to the copyright protectionand authentication of data in the network. This study aims to prevent unauthorized duplication of image and to transmit confidential image. By this way hackers will not suspect the existence of secret information. Conventional methods having information loss during recovery, it will be easily hacked, lower embedding capacity, requires more memory and power consumption. The proposed scheme offers an effective protection, data embedding along with high security. Curvelet transform and inverse curvelet transformare performed andthenvisible logo isembedded on colour image. For transferring confidential data, a content owner encrypts the original uncompressed colour image using an encryption key and then image-hider will compress the LSB ofeach pixel of all three planes in the encrypted colour image using an image-hiding key to create a space to hold secret image. In order to extract secret image and to recover the original content simultaneously both image hiding key and encryption key are necessary. Lower memory requirements, speed of encryption and randomization in encryption key generation are improved by parallel RC4 algorithm. Hidden image security will be increased by odd and even shuffling of secret image bits within compressed encrypted colour image. It has good embedding capacity and better quality recovered image than conventional methods.