Consultants put forward a proposal that Dundee would benefit from a £20 million system and they claimed disruption from building works could be kept to a minimum by measures including using leftover tracks from the old tram system.
Lobbyist Jim Harkins, who helped to prepare the proposal, suggested that a light rail "circulator" - similar to the one used in San Francisco - would see visitors spend more time and money in the city.
He also stressed that his firm's plan would have a much smaller footprint than other tram-train systems operating in Sheffield and Edinburgh. But city development director Mike Galloway said the tram plan was "expensive" and "limited" and Dundee already had "first class" transport.
The Dundee proposal, prepared by consultants Light Rail (UK) and lobbyist Jim Harkins, proposed trams running on a single two-mile route around the city centre.
But Mr Galloway said buses were a better option than "the limited, expensive and fixed nature of a tram operation".