Implicit representations have gained an increasing popularity in geometric modeling and computer graphics due to their ability to represent shapes with complicated geometry and topology. However, the storage requirement, e.g. memory or disk usage, for implicit representations of complex models is relatively large. In this paper, we propose a compact representation for multilevel rational algebraic spline (MRAS) surfaces using low-rank tensor approximation technique, and exploit its applications in surface reconstruction. Given a set of 3D points equipped with oriented normals, we first fit them with an algebraic spline surface defined on a box that bounds the point cloud. We split the bounding box into eight sub-cells if the fitting error is greater than a given threshold. Then for each sub-cell over which the fitting error is greater than the threshold, an offset function represented by an algebraic spline function of low rank is computed by locally solving a convex optimization problem. An algorithm is presented to solve the optimization problem based on the alternating direction method of multipliers (ADMM) and the CANDECOMP/PARAFAC (CP) decomposition of tensors. The procedure is recursively performed until a certain accuracy is achieved. To ensure the global continuity of the MRAS surface, quadratic B-spline weight functions are used to blend the offset functions. Numerous experiments show that our approach can greatly reduce the storage of the reconstructed implicit surface while preserve the fitting accuracy compared with the state-of-the-art methods. Furthermore, our method has good adaptability and is able to produce reconstruction results with high quality. (C) 2016 Elsevier Ltd. All rights reserved.