UPDATE 1-Babcock Infrastructure investors back Brookfield plan

* BBI set to be reborn as Prime Infrastructure on Nov 20

* Brookfield to take over Britain's PD Ports

* RBS counterproposal never got off the ground (Adds background)

MELBOURNE, Nov 16 (Reuters) - Shareholders in Babcock & Brown Infrastructure BBI.AX on Monday approved a $1.7 billion plan backed by Canada's Brookfield group (BAMa.TO) to rescue the debt-saddled Australian port, railway and pipeline asset manager.

BBI said it had received overwhelming support from shareholders for the recapitalisation proposal, which is set to be completed on Friday, with the group to be renamed Prime Infrastructure.

The plan calls for Brookfield to buy up to A$713 million ($665 million) in new shares, giving it a 35-40 percent stake in BBI, as part of a total A$1.5 billion equity raising by BBI.

Brookfield Asset Management, working with its satellite fund Brookfield Infrastructure Partners (BIP.N), will also buy Britain's PD Ports and a half share of Australia's biggest coal terminal, Dalrymple Bay, from BBI for A$295 million.

The vote put to rest efforts by Royal Bank of Scotland (RBS.L) to line up hedge funds to back a counterproposal. [ID:nSYD473744]

BBI shares last traded at 3.5 cents, valuing the group at A$91 million, a fraction of the value of its A$12.5 billion worth of assets. (Reporting by Sonali Paul)