The Queensland government was told late last year the Wivenhoe Dam storage level could be pre-emptively lowered to reduce flood impacts.
New documents submitted to the flood inquiry show then-Water Resources Minister Stephen Robertson sought "urgent advice" from the South-East Queensland Water Grid Manager on whether dam levels should be dropped, amid warnings of a bigger than normal wet season.
The October 25 letter said recent releases from Wivenhoe Dam had caused "significant inconvenience and isolation for residents in some downstream areas".
"With catchments saturated, I understand that even quite minor rainfall events will result in further water releases and further inconvenience for these residents," Mr Roberson wrote, in correspondence released by the Queensland floods commission of inquiry.
"By end November 2010, I would appreciate your advice as the available options and the likely benefits."
However, the formal response from SEQ Water Grid Manager Gary Humphrys did not arrive until Christmas Eve.
Mr Humphrys told Mr Robertson that dam operator Seqwater had no objection to drawing down Wivenhoe and Somerset dams down to 95 per cent of their full supply level.
Wivenhoe Dam can hold a total of 2.6 million megalitres but is deemed to be "full" of drinking water when it reaches 1.15 million megalitres.
The remaining space is used to store water from heavy rain events in a bid to reduce floods along the Brisbane River.
"Based on information currently available Seqwater has advised that releasing water to below full supply level may provide some benefits in terms of reduced community and operational impacts during minor inflow events, such as has occurred over the past month," Mr Humphrys said in the December 24 letter.
Mr Humphrys said the reduction would be aimed at preventing minor flooding events, but would have a "negligible" effect on preventing impacts from major downpours.
"The Water Grid Manager has advised Seqwater that, from a water security perspective, it would not object to water being released from Wivenhoe and Somerset dams to 95 per cent of storage capacity at any time until end March 2010," he wrote.
"Under this recommendation, storage levels could potentially be reduced by up to about 77,250 [megalitres]. This is equivalent to the amount of water released between 13 and 16 December 2010, through a single gate."
However, the government did not announce a reduction in the full supply level in the following weeks. The Brisbane River flood level peaked on January 13, inundating thousands of homes and businesses.
The government announced in February it would reduce Wivenhoe Dam to 75 per cent of its normal drinking water capacity until the wet season ended, but said such a move would not have been effective in preventing the massive January floods.
Mr Robertson is likely to be questioned about the dam management when he is called as the first witness when flood inquiry hearings begin in Brisbane next week.
The $15 million commission of inquiry is set to examine a range of issues stemming from the summer's deadly and devastating floods, including whether Wivenhoe Dam water releases into the Brisbane River were mismanaged.
The inquiry, headed by Court of Appeal Justice Catherine Holmes, is expected to focus on dam management and the adequacy of weather warnings during the first five days of hearings.
Mr Robertson is among 13 witnesses expected to be called to give evidence in the first week.
Others include Bureau of Meteorology Queensland regional director Jim Davidson.
The inquiry will also hear from SunWater's Rob Ayre, who was the senior flood operations engineer for Wivenhoe, Somerset and North Pine dams during the January flood.
Seqwater has repeatedly defended its handling of dam releases, saying they were made in accordance with the approved dam manual. Seqwater representatives will also give evidence next week.