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The Environment Court has given its approval to TrustPower's plans to build a hydro scheme on Marlborough's Wairau River.

The $280 million project, which will generate up to 70 megawatts of electricity, will see up to 60 percent of the river's water flow diverted and channelled through a 49km canal and six small power stations before returning to the river.

It could see Marlborough generate 85 percent of its own electricity and provide irrigation for a number of farmers in the Wairau Valley.

The Marlborough District Council gave the project resource consent in 2008 following a lengthy hearing process, but it was appealed to the Environment Court.

Save the Wairau group and Fish & Game oppose the project over concerns about environmental effects and the fishery in the river, while some residents feared the project would be unsafe.

The Department of Conservation originally opposed the project because it could endanger bird habitat but struck a deal with TrustPower and withdrew its appeal.

The Environment Court, in a decision released this week, admitted its decision was finely balanced but was satisfied the project followed the Resource Management Act and promoted the sustainable management of resources.

It said there were some unavoidable effects of taking relatively large flows of water from the river, and a cautious approach should be taken to the river birds.

The court's 257-page decision included a number of conditions on the project.

TrustPower's monitoring and management programme could protect the ecology of the river, the court said.

Some landowners oppose the scheme and say they will not sell to TrustPower, which already owns much of the land it needs and can seek to compulsorily buy the remainder of what it needs.

Scheme opponents are considering whether they can appeal the decision.