One of Quebec's most picturesque communities has decided it will borrow $700,000 to replace a dam and restore an artificial lake.

Pine Lake was first created in 1948 by residents of Hudson who decided a body of water would be a nice addition to their neighbourhood.

The lake, and the dam, were sold to the town of Hudson in 1984 with the condition that the town maintain the structure.

However earlier this year the dam cracked, letting the accumulated water pour out and Pine Lake returned to being a creek.

Residents were dismayed that the 66-year-old lake had dried up, but environmentalists were glad that the tiny stream had returned.

However after months of debate, and realizing that the minimum cost to remove the dam and reinforce a nearby road would cost $300,000, town officials decided on Monday to replace the dam.

"It's a political football," admitted mayor Ed Prevost.

"Pine Lake is as much part of Hudson as Hudson. It's an iconic thing, it's not just for the benefit of Pine Lake and people living close by but everyone who comes down."

Before work begins the town will have to commission environmental assessments, and take out a loan for the cost of the work.

Citizens living around the lake were so convinced the town would say no that they were ready to take legal action and force Hudson to abide by the 1984 agreement which guaranteed the upkeep of the dam.

Cythia Maher, who has lived near Pine Lake for 17 years, is glad the town will bring back the lake.

"Dredging it would be nice but if they don't have the fund put it back the way it was and we'll be happy," said Maher.