In this paper, a new approach to Spread Spectrum (SS) watermarking technique is introduced. This problem is particularly interesting in the field of modern multimedia applications like internet when copyright protection of digital image is required. The approach exploits two-predecessor single attractor (TPSA) cellular automata (CA) suitability to work as efficient authentication function in wavelet based SS watermarking domain. The scheme is designed from the analytical study of state transition behaviour of non-group CA and the basic cryptography/encryption scheme is significantly different from the conventional SS data hiding approaches. Experimental studies confirm that the scheme is robust in terms of confidentiality, authentication, non-repudiation and integrity. The transform domain blind watermarking technique offers better visual & statistical imperceptibility and resiliency against different types of intentional & unintentional image degradations. Interleaving and interference cancellation methods are employed to improve the robustness performance significantly compared to conventional matched filter detection.