Angus Council committee members voted 10-3 to approve the Slug of Auchrannie scheme at Den of Airlie, around a mile south of Lintrathen Loch and just under two miles from the Reekie Linn waterfalls, on the county’s border with Perthshire.

Recommended for approval by planning officials, the location of the planned 1.4 megawatt scheme sits in a Site of Special Scientific Interest and is part of the River Tay Special Area of Conservation.

It is also part of what British Lichen Society officials describe as the “world headquarters” for rare river jelly lichen and they claimed the scheme could threaten the prized population of the rare species.

The Scottish Environment Protection Agency (Sepa) is understood to have granted a licence for the run-off water energy project in the heart of the Den of Airlie nature reserve despite previous concerns were raised by Scottish Natural Heritage (SNH) and Sepa. It is understood recent amendments to the plan have satisfied all consultees.

The Airlie Castle Estate and the John Hogg Group project will involve a 14ft diameter tunnel extending some 656ft and including a 5.9ft diameter pipe and rails for maintenance bogeys, as well as a partially underground turbine house on the river’s north bank.

Project spokesman David Brown told councillors: “We are very mindful of the importance of this site and my brief is to deliver a viable scheme with the best environmental option.

“We understand the sensitivity of the site and we have a robust mitigation strategy in place.”

He said capital costs would be in the order of £5m, with almost £3m of that involving contracting costs including local labour.

The reserve is home to vulnerable flora and fauna, including internationally-protected river jelly lichen in the River Isla, and campaigners claim the project could do irreparable damage.

Airlie Castle Estate and the John Hogg Group spent four years developing plans for the scheme in the heart of the site of special scientific interest (SSSI) and have promised a sensitive development.

The developers say money from the scheme will be pumped back into the Den of Airlie to protect the stunning landscape.