A novel downscaling approach of the ERA40 (ECMWF 40-years reanalysis) data set has been taken and results for comparison with observations in Norway are shown. The method applies a nudging technique in a stretched global model, focused in the Norwegian Sea (67 degrees N, 5 degrees W). The effective resolution is three times the one of the ERA40, equivalent to about 30 km grid spacing in the area of focus. Longer waves (< T42) in the downscaled solution are nudged towards the ERA40 solution, and thus the large-scale circulation is similar in the two data sets. The shorter waves are free to evolve, and produce high intensities of winds and precipitation. The comparison to observations incorporate numerous station data points of (1) precipitation (#357), (2) temperature (#98) and (3) wind (#10), and for the period 1961-1990, the downscaled data set shows large improvements over ERA40. The daily precipitation shows considerable reduction in bias (from 50 to 11%), and twofold reduction at the 99.9 percentile (from -59 to -29%). The daily temperature showed a bias reduction of about a degree in most areas, and relative large RMSE reduction (from 7.5 to 5.0 degrees C except winter). The wind comparison showed a slight improvement in bias, and significant improvements in RMSE.