ATLANTA -- The three-state battle over water made scarce by the severe drought gripping the Southeast is moving out of the courtroom. At least for now.

Georgia Gov. Sonny Perdue on Tuesday dropped a lawsuit he had filed in the Middle District of Florida last month seeking an injunction against the U.S. Army Corps of Engineers.

Perdue said Tuesday that recent intervention by the Bush administration limiting how much water can be released downstream from Georgia to Florida and Alabama has made him optimistic the issue can be resolved outside of the courtroom.

"I never want to resort to legal action to settle disputes, but the seriousness of this drought forced me to explore every option available to protect Georgia's water resources." Perdue said in a statement.

Perdue's step back comes after a deal brokered in Washington in which the Army Corps of Engineers agreed to hold back more water in Georgia lakes as the governors in the three drought-stricken states work toward a water-sharing agreement. U.S. Interior Secretary Dirk Kempthorne and other administration met with the three governors.

The federal Fish and Wildlife Service must approve the change, which affects several species of endangered mussels and sturgeon downstream in Florida. But they have agreed to consider the recommendation by Nov. 15, far faster than the normal timetable.

Perdue has criticized the federal government for continuing what he calls excessive water releases from reservoirs such as Lake Lanier, Atlanta's main water supply, even as the drought has shrunk it to record lows. But neighboring states and environmentalists say Georgia's failure to plan for its growth has contributed to the problem.

Alabama Gov. Bob Riley and Florida Gov. Charlie Crist previously had fought Georgia's effort to keep more water, arguing that its demands were unreasonable and that reducing river flows could cripple their economies.

The three states have been locked in a legal battle over water rights for the better part of two decades. But the fight has intensified in recent weeks as a record drought has taken over much of the region. According to the National Drought Mitigation Center, almost a third of the Southeast is covered by an exceptional drought, the worst category.

Perdue warned on Tuesday that the state could renew its legal fight again if the cooperation fails in the tri-state water battle.