A new method for analysis of phosphorescence lifetime distributions in heterogeneous systems has been developed. This method is based on decomposition of the data vector to a linearly independent set of exponentials and uses quadratic programming principles for x2 minimization. Solution of the resulting algorithm requires a finite number of calculations (it is not iterative) and is computationally fast and robust. The algorithm has been tested on various simulated decays and for analysis of phosphorescence measurements of experimental systems with descrete distributions of lifetimes. Critical analysis of the effect of signal-to-noise on the resolving capability of the algorithm is presented. This technique is recommended for resolution of the distributions of quencher concentration in heterogeneous samples, of which oxygen distributions in tissue is an important example. Phosphors of practical importance for biological oxygen measurements: Pd-meso-tetra (4-carboxyphenyl) porphyrin (PdTCPP) and Pd-meso-porphyrin (PdMP) have been used to provide experimental test of the algorithm.