Some 45 years ago, a village in north Wales was drowned in the name of progress and the city of Liverpool. A new reservoir was needed, and Capel Celyn, its school, chapel, post office, farms and 12 houses would be subsumed to provide it. Nearly 50 people and a way of life in the Tryweryn valley which had lasted centuries were replaced by nearly 70 billion litres of water.

Homes were found for the displaced, but, to their families and Welsh patriots, the memories and resentment at what they saw as high-handed colonial treatment lingered, and lingers still. Its most vivid sign is the stark white lettering against a blood-red backdrop on a weathered piece of rock on the side of the A487, overlooking Llanrhystud, near Aberystwyth, bearing the slogan "Cofiwch Dryweryn" – Remember Tryweryn. First scrawled in the 1960s, it has been maintained and repainted every time it fades.

This week, there will be a new manifestation of the seismic event in 1965 that changed the emotional and political landscape of Wales for ever, giving growing power to the nationalist party Plaid Cymru. The last remaining members of the dispersed families whose schoolbooks still lie at the bottom of the Llyn Celyn reservoir will march through the Welsh-speaking town of Bala to call for the removal of the dam, so that the valley can be returned as a lasting memorial to the people of Tryweryn.

Llandderfel county councillor Elwyn Edwards, 67, saw his mother's family "lose everything" during the drowning. "I remember the water coming out in a huge gush. There was nothing left – not a tree, a hedge, no sheep, cattle, or birds singing. It was deathly quiet, like a funeral. My family couldn't bring themselves to watch it. They'd carried stones from the chapel themselves to protect it. They were rehoused, but were scattered all over the place. We lost our heritage; we lost everything. I used to play in the cemetery at the chapel where some of the early Quakers were buried. There's nothing left of them."

He and the Plaid Cymru heritage minister Alun Ffred Jones also witnessed the sabotaging of the opening ceremony by local residents. "They'd drowned this village and driven people from their homes, and they were suddenly arriving to have a tea party," Mr Jones, 60, Assembly Member for Arfon, said. "That really riled people."

"They were driving the dignitaries from Liverpool across the dam," Mr Edwards added. "Each time a car went past we'd lift it off the road and rock it. We ran down to the marquee and I saw a man pick up a brick and throw it. I even witnessed a woman who was anti-Welsh tearing down the Red Dragon and stamping on it. They beat her by the side of the road. After that, we cut the microphone wires and they couldn't carry on with the speeches. The drowning was a wake-up call."

Many, stung by the betrayal of one of the last remaining heartlands of Welsh culture and Welsh language, reacted politically, raising Plaid Cymru's share of the vote from 0.7 per cent in the 1951 general election to 5.2 per cent in 1959 – two years after a Bill authorising the flooding was passed without the backing of a single Welsh MP. Others, incensed by the lack of consultation, turned to violence.

Owain Williams, 75, was part of a trio of teenage "freedom fighters". The Clynnog county councillor was arrested and sent to prison for a year for blowing up a pylon; months later, one of his accomplices, Emyr Llywelyn Jones, was sent down for destroying the transformer that supplied electricity to the dam. "We used force to repel force," he said. "As Tryweryn was submerged, it stuck out as a symbol of what was happening to us nationally. It was the 1960s – a time of protest against imperialism."

In 2005, Liverpool officially apologised for the flooding of Capel Celyn and 800 acres of farmland, but they're still waiting for a memorial – a bronze sculpture of a phoenix rising from the ashes by Welsh artist John Meirion Morris. "We've raised £15,000 over the past 10 years," Mr Edwards said. "We need £300,000. We need to make sure people never forget."