A method of processing signals in a hearing aid system comprising the steps of: - providing a first input signal (120, 122) representing the output from a first input transducer of the hearing aid system; - providing a second input signal (123, 124, 125) representing the output from a second input transducer of the hearing aid system; - using a time-varying adaptive filter to filter the second input signal, hereby providing a filtered second input signal; - applying a time delay to the first input signal (120, 122) and hereby providing a delayed first input signal; - subtracting the filtered second input signal from the delayed first input signal to form a difference signal; - adapting the time-varying adaptive filter in accordance with a control algorithm, using an adaptive filter estimator based on the difference signal and the second input signal; - calculating a power estimate of the difference signal hereby providing a noise estimate; - calculating a power estimate of the delayed first input signal hereby providing a signal-plus-noise estimate; - providing the noise estimate and the signal-plus-noise estimate as input to a noise suppression gain calculator or providing the signal-plus-noise estimate and a second noise estimate to the noise suppression gain calculator, wherein the second noise estimate is provided by calculating a power estimate of the filtered second input signal when speech is not detected in the filtered second input signal hereby providing a correlated noise estimate and summing the noise estimate with the correlated noise estimate to provide the second noise estimate; - using the noise suppression gain calculator to provide a time-varying gain adapted for suppressing noise; and - applying said time-varying gain to the first input signal using a noise suppression gain multiplier. - providing a first input signal (120, 122) representing the output from a first input transducer of the hearing aid system; - providing a second input signal (123, 124, 125) representing the output from a second input transducer of the hearing aid system; - using a time-varying adaptive filter to filter the second input signal, hereby providing a filtered second input signal; - applying a time delay to the first input signal (120, 122) and hereby providing a delayed first input signal; - subtracting the filtered second input signal from the delayed first input signal to form a difference signal; - adapting the time-varying adaptive filter in accordance with a control algorithm, using an adaptive filter estimator based on the difference signal and the second input signal; - calculating a power estimate of the difference signal hereby providing a noise estimate; - calculating a power estimate of the delayed first input signal hereby providing a signal-plus-noise estimate; - providing the noise estimate and the signal-plus-noise estimate as input to a noise suppression gain calculator or providing the signal-plus-noise estimate and a second noise estimate to the noise suppression gain calculator, wherein the second noise estimate is provided by calculating a power estimate of the filtered second input signal when speech is not detected in the filtered second input signal hereby providing a correlated noise estimate and summing the noise estimate with the correlated noise estimate to provide the second noise estimate; - using the noise suppression gain calculator to provide a time-varying gain adapted for suppressing noise; and - applying said time-varying gain to the first input signal using a noise suppression gain multiplier.