The otter population in England and Wales is "healthy and continues to expand", a report has concluded.
Roads are now the biggest human threat to otters
An 11-year study by the Environment Agency suggested that declining levels of certain chemicals had allowed the mammals to recover.
Widespread use of pesticides such as dieldrin, which was banned in 1989, had been blamed for the animals' decline between the 1950s and 1980s.
The agency was confident that otter numbers would continue to increase.
The agency's science department collated data from a series of studies that looked at post-mortem examinations on otters between 1992 and 2003.
While other factors - such as habitat loss and changes to land management - compounded matters, the study suggested a strong correlation between organochlorine chemicals, such as the insecticide dieldrin, and the decline in otter numbers.
Graham Scholey, a conservation team leader for the agency, said dieldrin was widely used in post-war agriculture.
"It was used as a seed dressing and also in sheep-dip preparations," he explained, "so it was used in both lowland crop farming and upland agriculture."
Only one species found in UK, the European otter (Lutra lutra)
Diet of mainly fish, but also birds and small mammals
Breeds every two years; cubs stay with mother for a year
Average lifespan of four years, but can reach 12 years
Territory ranges between 1km and 40km
He added that once the pesticide had worked its way into watercourses, the chemical contaminated fish stocks, which in turn were eaten by the otters.
As dieldrin was a persistent organic pollutant that could remain in the environment for several decades, it had a "devastating impact" on top predators in the food chain.
A significant fall in otter numbers coincided with the introduction of dieldrin and other chemicals in the 1950s.
"One of the main factors of dieldrin poisoning was impaired reproductive abilities. That was probably one of the main reasons why otter numbers declined quite quickly," Mr Scholey suggested.
The chemical was progressively withdrawn from use from 1962 and eventually banned in 1989.
"The good news is that levels of dieldrin have fallen sufficiently to allow a recovery of otters."
Conservationists hope the population, estimated to be in the thousands, is healthy enough to allow the creatures to re-colonise former habitats outside the strongholds of south-west England and Wales.
However, Mr Scholey said the agency was not going to become complacent.
"The condition of the animals, at the moment, means that there are no major problems affecting the health of our otters relating to chemicals in the environment.
"But there is a whole new suite of chemicals being introduced all the time, so we need to keep an eye on that.
"We are reasonably comfortable with the chemical that we have looked at, but we now need to make sure that we are not missing a ticking timebomb in terms of the others."