In this paper, we address the issue of underdetermined source separation of non-stationary audio sources from a stereo (i.e. 2-channel) linear instantaneous mixture. This problem is addressed with a specific coder-decoder configuration. At the coder, source signals are assumed to be available before the mixing is processed. A timefrequency (TF) analysis of each source enables to select the one or two predominant sources (among I>2) in each TF region, and a corresponding source(s) index code is imperceptibly embedded into the mix signals using a watermarking technique. At the decoder level, where the original sources signals are unknown, the extraction of the watermark enables to locally reduce the underdetermined configuration to an (over)determined configuration. Sources signals can then be estimated using a classical (over)determined separation technique. Thereby several instruments or voice signals can be separated from stereo mixtures, enabling separate manipulation of the ...