The European Court of Justice ruled on Tuesday that a controversial project aimed at diverting Greece’s second-longest river, the Acheloos, from western Greece to the heavily farmed Plain of Thessaly, did not violate European laws in principle but expressed concerns about the potential environmental impact of the use of the water for irrigation.

In the ruling, the ECJ set out a series of conditions for the continuation of the project which will make it easier for the Greek Council of State, the country’s highest administrative court, to derail the initiative while it remains unclear whether the cash-strapped government will have the financial means to press forward with the diversion even if it can fulfill all the required terms.

Greek environmentalists had appealed against the project last year and the Council of State, agreeing with their view that the scheme would cause irreparable damage, referred their case to the European judicial authority.

The decision of the European court vindicates them in part as it notes that authorities should prohibit any “interventions” that could harm the environment, particularly areas included within the Natura 2000 European protected-zone network.

The ruling also noted that the project could only be deemed to be “in the public interest” if it is indisputably linked to serving public health and protecting the environment. In view of this, a plan to supply water to towns and villages would be deemed acceptable while the original aim of the Acheloos project -- to irrigate the Thessaly Plan -- would be harder to justify.

The decision also paves the way for the revocation of a law passed in 2006 by then Environment and Public Works Minister Giorgos Souflias foreseeing the diversion of the river toward Natura-protected areas.

In a joint statement on Tuesday, environmental protection groups said that an expensive public works project was unjustifiable at such a critical time for Greece’s economy and society.