A consistent treatment of environmental effects is proposed in the framework of the multiconfiguration time-dependent Hartree (MCTDH) method. The method is extended in view of treating complex molecular systems which require an exact quantum dynamics for a certain number of "primary" modes while an approximate dynamics is adequate for a class of "secondary" modes. The latter may correspond to the weakly coupled modes in a polyatomic molecule, or the first solvent shell in a solute-solvent complex. For these modes, a description in terms of parameterized functions is introduced. The MCTDH working equations are generalized to allow for the nonorthogonality of these functions, which may take, e.g., a multidimensional Gaussian form. The formalism is developed on the level of both the wave function description and the density matrix description. Dissipative effects are accounted for in terms of a stochastic Hamiltonian approach versus master equation approach in the respective descriptions.