Britain's largest overhead power line project has been approved despite fierce protests over the decision to erect towering pylons along 220km of the Highland's finest scenery.

The long-awaited go ahead for the power line, which will stretch from Beauly near Inverness to Denny near Falkirk on pylons up to 65m high, is expected to kickstart a huge overhaul of the UK's electricity network at a cost of up to £4.7bn.

The decision was applauded by the renewable energy industry and backed by many leading environment groups. They said the new line, which will be upgraded from 132kV to 400kV, was essential for plans to ramp up the output from wind, wave and tidal power projects, often best located in remote parts of the UK, and deliver it to the cities where most people lived.

But its opponents were furious, and accused the Scottish government of sacrificing large areas of the Highlands, including treasured beauty spots in Perthshire such as Queen's View on Loch Tummel, the Cairngorms national park and around Beauly near the Moray Firth.

Helen McDade, of the landscape conservation charity the John Muir Trust, one of the project's fiercest critics, said it was a "black day". She added: "Marching a 220km mega pylon line though some of our most world-renowned landscapes may be the most lucrative option for the energy industry but it is the wrong choice for Scotland."

The Scottish energy minister, Jim Mather, said the Beauly to Denny line was crucial in his government's efforts to generate up to 50% of Scotland's electricity from renewable sources and meet its promises to cut Scotland's CO2 emissions by 42% by 2020.

But to placate critics, he imposed new conditions, requiring the power companies to remove or improve 86.5km of line at five places, and improve "visual mitigation" of the line at Crieff, Stirling and Plean.

Mather said he agreed with the energy industry that blocking the new line, a joint £400m project between Scottish Power and Scottish and Southern, would have fatally undermined future green energy projects throughout the UK for the next decade. Yet, in an argument set to rise further in intensity as the UK's tough carbon targets loom, critics insist that new wave of power projects will scar the British landscape with bigger pylons, and make it far easier to build windfarms in unsuitable places.

The new line will replace an existing power line and actually use fewer pylons – 600 compared to the 800 currently in place. Many of the new pylons will be more hidden and further from homes.

Opponents said the largest pylons, which at 65m high will be 24m higher than the tallest existing pylons, would be vast, and have a footprint and volume seven times larger. Beauly, home to some of Scotland's oldest forest and rarest wildlife, will have a much larger substation for the new line and be the focal point for five power lines converging from across northern Scotland.

John Mayhew, director of the Association for the Protection of Rural Scotland, said it was "the most disappointing planning decision in Scotland for many years. Scotland's landscapes are not some endless resource which can be shaved away time and again – they are finite, they are much valued by local people and they are the main attraction to visitors."

Alex Salmond's nationalist government has championed green power in Scotland and while many environment groups such as WWF Scotland backed the scheme, it has been very nervous about the political backlash today's decision will cause.

The line, which was opposed by all the local councils affected and the Cairngorms park authority, goes through the key rural constituencies of three SNP ministers and its critics believe the SNP will lose votes at the next general election.

But Mather said the new line was economically vital. It will significantly increase the amount of electricity exported from northern Scotland, including massive windfarms planned for Shetland and Caithness, and wave and tidal plants planned off Orkney, by 6.4GW. A large coal-fired station generate 1GW.

In turn, a network of existing power lines across Scotland and northern England will be upgraded and new undersea cables laid down the east and west coast, increasing the capacity of the grid in Scotland by 11.4GW.

A major report last year on the future of the grid by the Electricity Network Strategy Group said £4.7bn worth of grid upgrades across Wales, Humberside and East Anglia, and around London, hinged on today's decision.

"It is vital for Scotland to upgrade its networks so that it can realise its energy potential and important if Britain is going to meet its climate change targets," said Chris Lock, a spokesman for the energy regulator, Ofgem.

The British Wind Energy Association said the Beauly Denny line would immediately kick start 1.5GW of new renewables projects and encourage the construction of a further 1.5GW of schemes. "This is good news," said Charles Anglin, a BWEA spokesman. "It is a first step towards rebuilding a 21st-century grid infrastructure which can accommodate a new generation of decentralised green energy."

Willie Roe, chair of Highlands and Islands Enterprise said: "It paves the way for the Highlands and Islands to capitalise on its place as the renewable energy engine room of Europe. It offers some of Scotland's most economically fragile areas the prospect of participating at the frontier of a globally important industry."