South Island power company Westpower says the government's decision to stop it building a hydro power scheme on the West Coast is a victory for minority environmental interests over common sense.
The scheme on the Waitaha River, between Hokitika and Franz Josef, would have powered up to 12,000 homes.
But it was vetoed yesterday by Environment Minister David Parker.
The Waitaha River has stewardship status, meaning its conservation values are yet to be determined.
But Westpower chief executive Rob Caldwell said there were a significant number of rivers on the West Coast that are quite similar.
He also said the impact of the scheme was minimal compared to the size of the area.
"The design of this scheme is a small weir that runs across the river to divert river into a tunnel. Within that tunnel there is a filling basin pen stock which runs down through the tunnel to a power house at the bottom of the tunnel which puts the water back into the river...
"We're looking at a very small area in which we would build the scheme and the impact of that is very, very low and we don't believe it would have that level of impact on users that the minister is relying on."
Mr Caldwell said Westpower had yet to decide on its next move, but wasn't ruling anything out.
Mr Parker told Morning Report he had duties under the Conservation Act to protect the values of a conservation area.
"I went into that decision very open-minded, by the end of it it was of the view that it was inappropriate to have a dam structure in a wilderness area.
"It would have affected the flow of the river downstream of that including through the Morgan Gorge."
He said he was "very comfortable" that he had made the right decision.