Chilean authorities have approved a £1.8bn plan to dam two rivers in Patagonia for hydroelectricity, triggering angry protests and claims that swathes of pristine wilderness will be destroyed.

The HidroAysén project envisages five dams to tap the Baker and Pascua rivers, an isolated area of fjords and valleys, and generate 2.75 gigawatts of power for Chile's booming economy.

The government has championed the dams as vital to poverty alleviation and economic growth, but public opinion has split, with many saying the project is unnecessary and will devastate an ecological haven.

Police arrested dozens of protesters and clashed with hundreds more in Coihaique, a Patagonian city where on Monday a government-appointed commission voted 11 to one in favour of the dams after a three-year environmental review.

The commissioners were kept indoors for their own safety as people threw rocks and battled police with water cannon and tear gas. Similar scenes unfolded in the capital, Santiago.

The Patagonia Without Dams advocacy group accused the commissioners of conflicts of interest and said the project was "destructive and illegal". It said the dams would flood at least 5,600 hectares of rare forest ecosystems, river valleys and farmland.

"We are outraged. We are calling on President [Sebastián] Piñera to overturn this decision and protect Patagonia," said Patricio Rodrigo, the group's executive secretary. Critics say the project would also drown the habitat of the endangered southern huemul deer, a national symbol.

An Ipsos poll said 61% of Chileans opposed the dams. The polarisation offered a sharp contrast to the nation's feelgood glow after last year's rescue of 31 trapped miners, an operation which boosted the conservative president's ratings.

The environment minister, María Ignacia Benítez, denied the commission's findings were a stitch-up in favour of energy corporations and banks which would profit from the project. The "very demanding" investigation adhered to laws and took into account the environmental impact, she told Radio Agricultura.

HidroAysén argued that the dams would provide cheap and clean electricity in comparison to oil and coal. Chile recently approved three coal plants, including the biggest one in Latin America.

The interior minister, Rodrigo Hinzpeter, told reporters: "The most important thing is that our country needs to grow, to progress, and for this we need energy."

Some analysts say Chile will need to triple its energy capacity in the next 15 years to feed fast-growing industries and cities. Though rich in copper and other minerals, the country imports 97% of its fossil fuels and relies mainly on hydropower for electricity, leaving it vulnerable to oil shocks and drought.

The council of ministers is expected to nod through the proposed dams but activists hope to win key concessions in the environmental impact assessment for the next phase of the project: 1,200-mile transmission lines, estimated to cost £2.3bn, to bring electricity from Patagonia to Santiago.

That review, due in December, could sharply restrict the number of lines or alternatively open Patagonia to multiple lines, roads and possibly more dams.

Much of the controversy hinges on whether Chile has viable alternative means to boost power capacity. With nuclear power widely considered anathema, some tout the Atacama desert as a source of immense solar thermal production, especially given its relative proximity to mines and industry.

"Numerous studies have shown that Chile can sustainably and safely meet its energy needs through increased investments in non-conventional renewable energy and energy efficiency, with less environmental, social and economic costs than HidroAysén," said Berklee Lowrey-Evans, of the International Rivers group.

However Maria Isabel Gonzalez, former head of Chile's National Energy Commission, rebuked foreign critics of the plan. "Chile is still a poor country, with 2.5 million poor people, and to overcome poverty we need energy, and for that reason we need to develop our own resources," she told AP. "It would be very selfish on the part of the rich countries to say, 'Look how they're destroying these uninhabited pristine areas.' "