The results of a study on the possible reintroduction of beavers in Wales are due to be presented this spring.
The feasibility study is being carried out by environment watchdog Natural Resources Wales on behalf of the Welsh Government.
NRW officers are studying beaver reviews from England and Scotland to assess how they might apply to Wales.
The aim is to develop a position and policy framework on beaver reintroductions and potential future legal protection of the semi-aquatic creatures.
Conservation groups say beavers can benefit a wide range of other animals and plants in rivers and wetlands by the way they engineer the habitat.
Any release of beavers into an enclosure or the wild in Wales requires an NRW licence and a public consultation. Matters such as site security, accidental beaver escape, operating techniques and monitoring are weighed up.
A Welsh Government spokesman said: “We have asked Natural Resources Wales to conduct a feasibility study on the reintroduction of beavers in Wales.
“Beaver reintroduction programmes have proved successful in boosting the health of plants, wildlife and the UK countryside, but we recognise they can have undesirable effects too, especially when they are not managed carefully.
“We look forward to seeing all evidence presented in the study in spring this year.”
The Welsh Government said it has provided funding for projects, including beavers in a fenced enclosure at Cors Dyfi, near Machynlleth – the beavers arrived there in 2021 after a licence was granted – and the development of a proposal for a wild release on the River Dyfi.
Alicia Leow-Dyke, of the Welsh Beaver Project, said it planned to submit an application for a beaver reintroduction on the Dyfi.
She said the group had also helped the Montgomery Wildlife Trust with its successful licence for the Cors Dyfi nature reserve.
The beavers there were in an enclosed seven-acre area, she said, and “doing really well”.
Miss Leow-Dyke explained that the boggy nature reserve was drying out after willow replaced a conifer plantation. Beavers helped control the willow, she said, by coppicing it and eating and its bark and leaves. That should allow bog plant life to establish itself and improve the habitat.
Miss Leow-Dyke said beavers ate willow, aspen and other deciduous trees like hazel, and also softer vegetation like brambles, aquatic plants, reeds and rushes.
Beaver management, she said, was an important part of any release of the animals.
“Negative impacts may occur in some areas, so you’ve got to make sure you’ve got management in place to mitigate that,” she said. “That has been done in England and Scotland.”
The National Farmers’ Union has expressed concern about beaver dams posing a flooding risk to agricultural land, and said the UK Government should have created a clear management plan at the very least before introducing the protection legislation for beavers in England.