Plans for a controversial windfarm at a Perthshire beauty-spot have been approved - despite almost 700 objections and concerns about the impact on local water supplies.

In a 75-page judgment issued yesterday, Scottish ministers overruled a decision by Perth and Kinross Council to refuse a 16-turbine development at Drumderg, near Alyth.

The ruling, which follows a four-week public inquiry that ended in June, has disappointed opposition campaigners.

It has been welcomed by the company behind the £30million plans, Scottish and Southern Energy.

Local people who formed the Not on Drumderg (Nod) group are now facing a £100,000 bill for their participation in the inquiry, including fees for their QC, John Campbell.

Sylvia Thorne, who lives about a mile from the site north of Bridge of Cally, and is the co-ordinator of Nod, said: “It hasn’t really sunk in yet, but we lose all ways.

“I am quite frightened for Scotland because of this Government’s policies that seek to make us the windfarm capital of Europe. It just makes me weep.

“I feel terrible about this, I have devoted four years of my life to fighting this development which will completely dominate our lives and the landscape.”

Mid-Scotland and Fife Tory MSP Murdo Fraser, who gave evidence at the public inquiry and who lives at Alyth, said: “I am extremely disappointed by the decision to allow Drumderg windfarm to be built, and I know that many people will be surprised and gutted by this news.

“There is huge local public opinion against this windfarm and it has already been democratically rejected by the local authority.

“I believe the reporters’ unit that carried out the public inquiry into the appeal for the windfarm application has made the wrong decision, and that the businesses and the people of Perthshire will now see the consequences.

“Drumderg windfarm application was rejected at local level by Perth and Kinross Council, and yet the Scottish Executive still overturned the decision, and that is why I believe we urgently need new guidelines and procedures relating to the siting of onshore windfarms.

“This decision will leave a lasting scar on our landscape and that is something we may now have no option but to accept.”

Leader of Perth and Kinross Council Jimmy Doig, said: “The council received notification of the Scottish Executive reporter’s decision regarding the Drumderg windfarm proposal yesterday morning, and we are currently considering the detail of it.”

The inquiry’s decision was welcomed by Ian Marchant, Scottish and Southern’s chief executive.

He said: “Our priorities are now to ensure that the construction work at Drumderg is carried out in a professional manner which reflects the concerns of local people, and to secure consent to develop additional windfarms in other parts of Scotland.”

The company said it aimed to have the 350ft high turbines, which are expected to generate enough electricity to power around 35,000 homes, up and running sometime in 2008. Building work is scheduled to start later this year.

Councillors threw out plans for the 32 megawatt development, five miles from Alyth, in February 2005, saying they presented an unacceptable risk to the water supply and a peat area classified as a conservation site.

As well as ruling against the council, the public inquiry also awarded expenses to Scottish and Southern, which the company say will be used to invest in energy and environment related projects for communities in the area.