Privacy preserving data mining has become increasingly popular because it allows sharing of privacy-sensitive data for analysis purposes. However, existing techniques such as random perturbation do not fare well for simple yet widely used and efficient Euclidean distance-based mining algorithms. Although original data distributions can be pretty accurately reconstructed from the perturbed data, distances between individual data points are not preserved, leading to poor accuracy for the distance-based mining methods. Besides, they do not generally focus on data reduction. Other studies on secure multi-party computation often concentrate on techniques useful to very specific mining algorithms and scenarios such that they require modification of the mining algorithms and are often difficult to generalize to other mining algorithms or scenarios. This paper proposes a novel generalized approach using the well-known energy compaction power of Fourier-related transforms to hide sensitive data values and to approximately preserve Euclidean distances in centralized and distributed scenarios to a great degree of accuracy. Three algorithms to select the most important transform coefficients are presented, one for a centralized database case, the second one for a horizontally partitioned, and the third one for a vertically partitioned database case. Experimental re-