Permafrost thaw in continental lowlands produces large number of thermokarst (thaw) lakes, which act as a major regulator of carbon (C) storage in sediments and C emission in the atmosphere. Here we studied thaw lakes of the NE European permafrost peatlands - shallow water bodies located within frozen peat bogs and receiving the majority of their water input from lateral (surface) runoff. We also conducted mesocosm experiments via interacting lake waters with frozen peat and dominant ground vegetation - lichen and moss. There was a systematic decrease in concentrations of dissolved C, CO2, nutrients and metals with an increase in lake size, corresponding to temporal evolution of the water body and thermokarst development. We hypothesized that ground vegetation and frozen peat provide the majority of C, nutrients and inorganic solutes in the water column of these lakes, and that microbial processing of terrestrial organic matter controls the pattern of CO2 and nutrient concentrations in thermokarst lakes. Substrate mass-normalized C, nutrient (N, P, K), major and trace metal release was maximal in moss mesocosms. After first 16 h of reaction, the pCO2 increased ten-fold in mesocosms with moss and lichen; this increase was much less pronounced in experiments with permafrost peat. Overall, moss and lichen were the dominant factors controlling the enrichment of the lake water in organic C, nutrients, and trace metals and rising the CO2 concentration. The global significance of obtained results is that the changes in ground vegetation, rather than mere frozen peat thawing, may exert the primary control on C, major and trace element balance in aquatic ecosystems of tundra peatlands under climate warming scenario.