The only real problem here is the exact degree of knowledge on which the UFP based its initial decision to do business with the Son'a. Did they know enough to be guilty of ignoring their own laws and ideals? Or were they told suitable lies? Remember that the Son'a plan hinged on lies (it was imperative that the Ba'ku not be talked with, and the only way to gag them was to lie about who they were), and they were in a position to control those to a great degree. But not absolutely. So...
Dougherty supposedly "always" knew the Ba'ku were not natives. At least he feigns no surprise at the revelation. But the "revelation" is obvious to any casual observer anyway, as the isolated village could not be native. Yet there are dozens of scenarios by which 600 people might end up living on a planet in iron age conditions. Dougherty clearly knew which scenario applied here - but did the Council?
Or was the point here that the Son'a said "we know there's this fountain of youth (well, middle-agedness) here, and a mystery settlement of 600 people there, and it's
your planet, so please observe like you so often do and find out who these people are, then gently relocate them, pretty please"?
They could leave the mystery open, which would make the Council quite receptive to duck blinds and whatnot. And the truth would soon be discovered "through Federation effort", after which the deportation plan could go ahead. Depending, of course, on which "truth" they "discovered".
There are probably several "truths" that would allow the Council to proceed with the deportation without having to break their own laws and rules. The easiest one (although known to be false to Dougherty) would be "no, they are not natives - but they have
gone native in all this time <insert fake figure here to make the claim easier to swallow> and are essentially primitives now, and can be moved via the holo-trick without them spotting anything amiss". They are formally outside PD protection and ineligible as owners of the planet because of their history, but deportable in practice because of their current nature.
That takes some twisting and bending, but probably not breaking. And the Council would be well motivated to do the twisting in this case.
Also, once the Federation Council was aware that the Ba'ku were aware of them, the deal with the Son'a was off. This was made clear in dialog at the end of the movie.
I doubt that...
What assuredly would make the Council turn against the Son'a was spelled out: firing the collector while the Ba'ku were still on the planet.
What supposedly would make the Council drop the Son'a was implied in the scene where Dougherty has his change of heart (and gets killed for it): the Federation did not know of the family feud, and was operating on a totally false premise here.
That the Council merely learning that the Ba'ku had seen through the duck blind would make them cancel the deal is never indicated. When the duck blind falls, Dougherty still things it's all salvageable.
The message Riker is trying to get out, that of a "valiant struggle" on the planet, is something Ru'afo thinks will ruin everything, but Dougherty doesn't think there's anything to Riker's message that would be a showstopper. Ru'afo still browbeats him to stopping Riker - without revealing the
true reason why the project can't be made a public hot potato. Dougherty thinks Ru'afo worries about a delay, and thinks that after the delay, the Council would still proceed - but in fact Ru'afo worries about an investigation that would reveal the feud.
Timo Saloniemi