This paper addresses the problem of scatternet formation and maintenance for multi-hop Bluetooth based personal area and ad hoc networks with minimal communication overhead. Each node is assumed to know its position and position of all its neighbours. The proposed formation algorithms have three phases. In the first phase the unit graph is constructed (each node establishes connection with all its neighbors that are located within its transmission radius, which is equal for all nodes), and, if planar structure is desirable, localized sparse subgraph (such as relative neighbourhood or Gabriel graph) is extracted. In the second phase, the degree of each node is limited to 7 by applying Yao subgraph construct simultaneously on all nodes with excessive degree, followed by either elimination of directed edges or the application of reverse Yao construct. In the last phase, master-slave relations are created by applying higher degree priority (with dominating set membership as the primary ke...