A West Coast iwi has defended its decision to accept money from Meridian Energy for advice on the effects of a $300 million hydro dam.

Meridian Energy paid money to local iwi Ngati Waewae after the iwi changed its position on the 80-metre high dam on the Mokihinui River.

The dam will wipe out 330ha of native rain forest 3km upstream of the township Seddonville and create a 14km-long lake.

Meridian Energy was granted resource consent earlier this week and confirmed to Radio New Zealand on Friday that money changed hands between the state-owned enterprise and Ngati Waewae.

Today, iwi chairman Francois Tumahai emphasised the mitigation money was a legitimate approach for parties in resource consent application.

"Mitigation can benefit the wider community, not just the people securing the mitigation package.

"For instance, protocols can be put in place to protect certain areas, to limit the impact of earthworks, to require archaeological assessment, to relocate important flora and fauna and so on," he said.

Mr Tumahai said Meridian had recommended extensive conditions of consent to ensure cultural losses were properly mitigated.

Last week Meridian spokesman Alan Seay told nzherald.co.nz the money changed hands for advice and the person from Ngati Waewae who initially spoke out against the dam was not representing the iwi.

Mr Seay would not say just how much Meridian paid for what he called reports.

"It's a normal commercial arrangement. We engage all sorts of experts on different aspects of projects, you know - ecologists, scientists - we pay for their services in exactly the same way. Now, there doesn't seem to be a problem in keeping the contracts with scientists confidential, why is it any different with the expert advice from local iwi?"

Mr Seay also confirmed a second payment "for mitigation" for the mauri-ora - or life force - of the river once the dam is built.

"That's what we're required to do under the Resource Management Act," Mr Seay said.

Asked why that was confidential, Mr Seay said: "Because we chose to. It's for reasons for our choosing."

"They don't feel as if they want to reveal that number and nor do we," Mr Seay said.

He said anyone who perceived there could be something wrong with money changing hands between a resource consent applicant and an affected party did not understand the process.

"People may say that the mauri-ora of a river is intangible but for tangata whenua it is very real," Mr Seay said.

Asked what factors were considered when putting a price on mauri-ora, Mr Seay could not say but said he would get back to nzherald.co.nz.

In February, 2009, the Conservation Department was criticised over its secret agreement worth $175,000 with Meridian Energy in May, 2007.

DoC agreed that it would drop all its outstanding issues in relation to Project Hayes and adopt a neutral stance on the project.

The Green Party and the Environmental Defence Society attacked the confidential nature of the agreement.

- With NZPA