A firm behind a supposedly green energy scheme that caused hundreds of years worth of pollution and wiped out one of the world's most important populations of a highly endangered species has been fined.

The hydro scheme – to produce electricity for 600 homes – destroyed a colony of protected freshwater pearl mussels and devastated a river.

In the space of a few months, the contractors at English company Shawater Ltd caused the equivalent of "hundreds of years" of pollution and killed hundreds of rare mussels.

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The work to the River Lyon was so disastrous that the basic repair bill ran to almost £1 million.

Shawater, which designed the small hydro-scheme around 12 miles from Aberfeldy, Perthshire, has been fined £4000. The directors of two other companies involved in the scheme had their sentences deferred.

Sheriff Michael Fletcher said: "The inadequate protection of the river was not a one-off or an isolated incident, but a series of deficiencies over a lengthy period. This was a project taking place on a river system where it was known very delicate wildlife could be affected."

Shawater had overseen the scheme, but Perth Sheriff Court was told the firm – run by engineer Dr Thomas Shaw – had been making a loss and would be dissolved.

Shawater last week admitted causing damage to pearl mussels in the building of a hydro scheme in Glen Lyon.

Alan Smith, 48, a director of A&C Construction, and Charles Kippen, 52, from Stanley, Perthshire, a director of Chic Kippen & Son, admitted similar charges.