Meridian has pulled the plug on its proposed Mokihinui hydro project on the West Coast of the South Island.

The plan had been to build an 85 metre-high dam on the Mokihinui River north of Westport, creating a 14 kilometre-long lake.

It would have produced enough electricity to power up to 51,000 households, and would have been the largest inundation of public conservation land since Manapouri.

Meridian Energy said today it would not proceed and had formally withdrawn from the Environment Court process.

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Chief executive Mark Binns said the decision was difficult and followed a full review of the hydro scheme and the risks and uncertainties the project faced prior to becoming a reality.

However, it still needed to agree land access with the Department of Conservation.

"The project had a strong business case and would have been beneficial to the West Coast, but it was challenging as the project footprint encroached on Department of Conservation stewardship land.

In January, Meridian walked away from Project Hayes, the 176-turbine wind farm proposed for the Lammermoor Range in Central Otago.