Meridian Energy has received the go-ahead for its proposed Mokihinui hydro scheme north of Westport, outraging conservationists.

The state-owned power company plans to spend about $300 million building an 80-metre high hydro dam and power station 3km upstream of the settlement of Seddonville.

The dam would create a 14km-long lake.

"The hearing committee decided two-to-one to grant the consents -- it was a particularly difficult and finely balanced decision," West Coast Regional Council compliance and consents manager Colin Dall said.

The 34 consents would be subject to some 200 conditions.

Forest and Bird South Island manager Chris Todd said the group was considering lodging an appeal with the Environment Court.

"We're pretty outraged by this decision. This will be the biggest inundation of conservation land ever in New Zealand," he said.

Another dam was "completely unnecessary and highly destructive".

"If we are now damming pristine rivers, then nothing is safe "It's a huge backward step for conservation," Mr Todd said.

Mokihinui's river gorge and forest contained rare species including native ducks, giant land snails and long-fin eels.

"You can't replace a river like the Mokihinui, you can't buy it and you can't compensate for it."

Hydro Development Limited's recently approved Stockton hydro scheme north of Westport, and TrustPower's St Arnaud hydro scheme, meant any other power projects were unjustified on the West Coast, Mr Todd said.

Meridian and Buller interests have welcomed the dam's approval.

Meridian chief executive Tim Lusk said its hydro project had the "overwhelming support" of locals, and security of supply would be significantly improved.

"For a long time the West Coast has been dependent on a long and vulnerable transmission line transporting power to the region from the Waitaki. Mokihinui will allow the region to use its own natural resources to provide a source of clean, renewable power."

Meridian would carry out coastal erosion control works.

"Clearly we are aware that there will be some environmental impact from the project," Mr Lusk said.

"The decision contains a large number of conditions aimed at ensuring that environmental effects are kept to a minimum."

Buller Mayor Pat McManus said the district needed a reliable source of energy if it was going to grow.

However, the large number of conditions imposed could be a challenge to the scheme proceeding, he said.

Commissioners have imposed a raft of requirements including: mitigation measures, management plans and monitoring programmes, 'adaptive management' conditions, habitat enhancement and predator control (over 3000ha), an initial bond of $500,000, plus $500,000 to the Buller District Council for 'community purposes' in the Mokihinui Catchment.

Meridian has previously said the scheme would produce between 310 and 360 gigawatt hours per year of electricity and power about 45,000 homes on the West Coast.

Construction was expected to take three years and employ more than 300 workers, dropping to six once the dam was up and running.