An electrocardiogram (ECG) data compression algorithm using a polygonal approximation and the template beat variation method (TBV) has been evaluated by reconstruction error and automatic interpretation. The algorithm combining SAPA3 with TBV (SAPA3/TBV) has superior compression performance in PRD and compression ratio. The reconstruction errors, defined as the difference of the amplitude and the time duration between the original ECG and the reconstructed one, are large at waves with small amplitude and/or gradual slopes such as the P wave. Tracing rebuilt from the compressed ECG has been analysed using the automatic interpretative program, and the diagnostic answers with the realated measurements have been compared with the results obtained on the original ECG. The data compression algorithms (SAPA3 and SAPA3/TBV) have been tested on 100 cases in the data base produced by CSE. The reconstruction errors are related to the diagnostic errors. The TBV method suppresses these errors and more than 90% of diagnostic agreements at the error limit of 15µV can be obtained.