1. A method for minimizing computations required for compression of motion video frame sequences using multi-resolution mean pyramid technique while maintaining at least a predefined picture quality level by dynamically adjusting the number of Candidate Motion Vectors (CMVs) propagated to each higher resolution level comprising: establishing a relationship between quantized values of frequency content of the reference macroblocks in said video frames against distortion levels resulting from the mean pyramid averaging process; determining the frequency content of each said macroblock; predicting the distortion resulting from mean pyramid generation over said frequency content using said relationship; computing the limiting Mean Absolute Difference (MAD) value for maintaining picture quality using said predicted distortion value; and propagating those CMVs whose MAD value falls below said limiting MAD value.