Abstract. It is proved that if G is a finite group, then the order of G is a proper upper bound for the phantom number of G. This answers a question of Benson and Gnacadja. More specifically, if k is a field whose characteristic divides the order of G, and Φ is the ideal of phantom morphisms in the stable category k[G]-Mod of modules over the group algebra k[G], then Φ n−1 = 0, where n is the nilpotency index of the Jacobson radical J of k [G]. If R is a semiprimary ring, with J n = 0, and Φ denotes the phantom ideal in the module category R-Mod, then Φ n is the ideal of morphisms that factor through a projective module. If R is a right coherent ring and every cotorsion left R-module has a coresolution of length n by pure injective modules, then Φ n+1 is the ideal of morphisms that factor through a flat module.These results are obtained by introducing the mono-epi (ME) exact structure on the morphisms of an exact category (A; E ). This exact structure (Arr(A); ME) is used to develop further the ideal approximation theory of (A; E ), by proving new versions of Salce's Lemma, the Ghost Lemma of Christensen, and Wakamatsu's Lemma. Salce's Lemma states that if (A; E ) has enough injective morphisms and projective morphisms, then the map I → I ⊥ on ideals is a bijective correspondence between the class of special precovering ideals of (A; E ) and that of its special preenveloping ideals. The exact category (Arr(A); ME) of morphisms allows us to introduce the notion of an extension i ⋆ j of morphisms in an exact category (A; E ), and the notion of an extension I ⋄ J of ideals of A. The Ghost Lemma, instrumental in proving the consequences above, asserts that the class of special precovering (resp., special preenveloping) ideals is closed under products and extensions and that the bijective correspondence of Salce's Lemma satisfies (IJ )Wakamatsu's Lemma is the statement that if a covering ideal I is closed under extensions I ⋄I = I, then I is a special precovering ideal that possesses a syzygy ideal Ω(I) ⊆ I ⊥ generated by objects.