The planned scheme on the River Braan had looked certain to become the subject of a public inquiry. But Perth and Kinross Council is now hoping to resolve a row brewing between the developer and objectors. The Scottish Executive will decide whether the plan, which could power more than 2000 homes, could be approved.
The scheme's developer, Npower Renewables, has accused Sportscotland of using flawed claims to object to it. Npower criticised Sportscotland for supporting the scheme's main opponents - the Scottish Canoe Association - which claimed water levels on the river near Dunkeld would drastically drop if the scheme went ahead.
Perth and Kinross Council officials, who recommended that the authority's development control committee should oppose the scheme on environmental grounds, said such a move was likely to trigger a public inquiry. However, councillors decided to offer no objection in a bid to resolve the concerns.
Npower said it had made an effort to reach a compromise with the canoeists, by offering to shut down the scheme at weekends.
