Up to £3m could be borrowed by Norwich City Council to pay contractors to speed up the installation of water-saving measures in hundreds of council homes.
Labour-run City Hall is prepared to take the step because it needs to adhere to eco-rules to unlock the development of 1,100 new homes through the Anglia Square shopping centre revamp.
Councillors unanimously agreed, at a meeting on Wednesday, to give officers the opportunity to draw on a loan from the Nutrient Mitigation Fund.
That issue first arose in March 2022, when councils were told by government advisors Natural England that they could not permit housing applications within catchment areas of the River Wensum and the Broads, because of concerns nutrients created by development could go into waterways and harm species.
Councils were told developments had to prove they would not lead to an increase in phosphate or nutrient run-off.
Or, if they would, then measures would be needed to mitigate for that.
The city council's mitigation scheme was to install water-saving measures in its council homes, giving residents new water fittings to reduce usage.
The idea was the council would then be able to demonstrate mitigation - unlocking key developments, such as the revamp of Anglia Square.
But officers said putting in the water fittings was not happening rapidly enough to meet the expected need for the first phases of Anglia Square - so the loan is sought to pay a contractor to do more of that work.
Officers say any money borrowed will be recouped from housing developer contributions.
And Adam Giles, City Hall's cabinet member for planning and regulatory services, said the interest on the loan would be "around the Bank of England's base interest rates".
The city council bought the Anglia Square site for £5.6m, with its £350m revamp expected to be funded by housing developers and other investors, including Aviva.
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