Meridian Energy has been given the green light for a $300 million hydro scheme on the West Coast, sparking anger from conservationists and condemnation from a government ally.

The state-owned power company wants to build an 85m-high hydro dam and power station on the Mokihinui River north of Westport which it says will secure electricity supply in the region.

Revenue Minister and United Future leader Peter Dunne said the decision by planning commissioners was "narrow-minded and backward". He is a minister outside cabinet, although coalition partners are free to comment on matters that are outside their portfolios.

He said he would consider joining an appeal against the dam which will create a narrow 14km-long lake.

"Hasn't the time come to say we have dammed enough rivers. Let's protect the few truly wild rivers that remain and instead invest in new technologies such as solar, wind and tidal generation."

Energy Minister Gerry Brownlee yesterday had no comment. Last year opponents of the project seized on reported remarks at a public meeting where he said the project would not go ahead.

Mr Brownlee later said he was quoted out of context. A spokesman said yesterday the minister was not commenting on the commissioners' decision as it was a "process issue".

The West Coast Regional Council's hearing committee decided two-to-one to grant the 34 consents that would be subject to 200 conditions.

Forest & Bird Top of the South field officer Debs Martin said the dam would result in "the greatest inundation of conservation land for a hydro scheme in New Zealand".

"It's a tragedy for the rare native blue ducks, giant land snails, longfin eels and other creatures that live in or beside the Mokihinui. They will be wiped out."

Green Party Conservation spokesman and West Coast MP Kevin Hague said although the consent was granted the dam still needed to obtain DoC concessions to cut down the forest.

"There is nothing to recommend this dam. I urge the Minister of Conservation [Kate Wilkinson] to act as a good landlord of the public land affected when she gets the chance."

The party was also considering joining any appeal.

Meridian spokesman Alan Seay said an appeal was expected and this made it impossible to put a timeframe on the project.

Chief executive Tim Lusk said the West Coast had been dependent on a long and vulnerable transmission line transporting power to the region from the Waitaki.

Meridian has said the scheme would produce enough power for about 45,000 homes.