We propose a novel way to design maximally deci- mated FIR cosine modulated filter banks, in which each analysis and synthesis filter has linear phase. The system can be designed to have either the approximate reconstruction property (pseudo-QMF system) or perfect reconstruction property (PR system). In the PR case, the system is a paraunitary filter bank. As in earlier work on cosine modulated systems, all the analysis filters come from a FIR prototype filter. However, unlike in any of the previous designs, all but two of the analysis filters have a total bandwidth of 27r/M rather than π/M (where 2 M is the number of channels in our notation). A simple interpretation is possible in terms of the complex (hypothetical) analytic signal corresponding to each bandpass subband. The coding gain of the new system is comparable with that of a traditional M-channel system (rather than a 2M-channel system). This is primarily because there are typically two handpass filters with the same passband support. Correspondingly, the cost of the system (in terms of complexity of implementation) is also comparable with that of an M-channel system. We also demonstrate that very good attenuation characteristics can be obtained with the new system.