A 100-megawatt dam in Buller has won resource consent in a 2-1 split decision by commissioners.
The approval will allow Meridian Energy to build an 85-metre-high dam on the Mokihinui River just upstream from Seddonville.
The dam will form a 14km-long lake, flooding 280 hectares area of rimu, matai and northern rata bush.
In their decision, commissioners for the West Coast Regional Council and Buller District Council acknowledge that the habitats will be destroyed.
However, they say the creation of a 6000-hectare, predator-controlled area by Meridian will adequately compensate for the loss.
Meridian believes the scheme is good news for the West Coast, which is at present dependent on electricity brought in via transmission wires.
Environmental group Forest and Bird says the decision to go ahead with the dam is tragic and it is considering appealing against the decision.
