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This paper presents a controller for an active filter to compensate reactive power and current harmonic distortion in a single phase system, i.e., to guarantee a power factor close to unity. The proposed controller considers the negative effects caused by the interaction between load and line impedances, which may lead to instabilities when the controller is enabled. The idea behind the solution consists in the introduction of a lead compensator which replaces the conventional proportional term. The lead compensator has an associated gain that is adjusted by an adaptation law which searches for the best gain to maintain the stability. This modification improves the stability conditions when the load and source impedances are considerable. In particular, the scheme provides a solution in a critical scenario, when the load is composed by a capacitor connected in parallel to a distorted current source. Special attention is given to the current control loop because the instability problems arise precisely in this loop. Numerical results are provided to illustrate the benefits of the proposed solution.