WASHINGTON -- Federal biologists signed off on a plan Friday to reduce the flow of water from Lake Lanier, the main water source for Atlanta and the focal point of a three-state water fight as the Southeast contends with a historic drought.

READ: Fish and Wildlife's Official Ruling

The U.S. Fish and Wildlife Service decided that federally protected mussels can live with less water from Lanier, which could allow drought-sticken Georgia to keep more water in the drying lake.

Georgia Gov. Sonny Perdue has criticized the federal government for continuing what he calls excessive water releases from north Georgia reservoirs even as the drought threatens Atlanta's water supplies.

The fast-growing Atlanta region relies on the lake for drinking water. But power plants in Florida and Alabama depend on healthy river flows, as do farms, commercial fisheries, industrial users and municipalities. The corps also is required to release adequate flows to ensure habitats for species protected by the Endangered Species Act, such as the mussels.

Florida and Alabama have balked at Georgia's effort to keep more water, arguing that its demands were unreasonable and that reducing the flows downstream could cripple their economies.

Earlier this month, at a three-state water meeting in Washington, the Army Corps of Engineers said it wanted to temporarily cut the flow of water to Florida by 16 percent until the drought breaks, but needed the approval of Fish and Wildlife.

It made for a temporary truce in a tug-of-war that has pitted the states against each other for the better part of two decades, but has intensified as record drought descended over much of the region.

But Florida last week backed away from the agreement, saying the reductions could cause a "catastrophic collapse of the oyster industry" and "displace the entire economy" in the Florida Panhandle.

More than a quarter of the Southeast is covered by an "exceptional" drought -- the National Weather Service's worst drought category.