In the present decade, increasing resistance of pathogenic microbes to drugs and bioactive organic compounds has led to extensive research on inorganic metal based nanoparticles as potential bacteriocidal materials in preparation of antimicrobial polymer nanocomposites. Although metal based nanoparticles like silver nanoparticles (Ag-NP) has established itself as a highly potent antimicrobial even at very low concentrations, instability stemming from high surface to volume ratio to form aggregates has been a barrier for its extensive application in fabrication of polymer nanocomposites. Thus, supports for Ag-NP to control its particle size has been under research attention to obtain uniform sized nanoparticles supported on carriers leading to high antimicrobial efficiency. In the present work, montmorillonite clay (Mt) has been utilised as a support for formation of silver nanoparticles. Mt clay was first acid-activated using mineral acid and further converted to silver-montmorillonite (Ag-Mt) nanohybrid complex using silver nitrate. TEM images of Ag-Mt confirmed deposition of Ag-NP (~10 nm) on surface of Mt sheets although no reduction medium was employed. Ag-Mt powder showed superior biocidal action against pathogenic bacteria at very low concentration (5 ppm). Ag-Mt was further melt-mixed in HDPE in a co-rotating twin-screw extruder with varying Ag-Mt concentration (from 1 wt% to 5 wt%). The developed HDPE nanocomposites were characterized using TEM and XRD which suggested exfoliated morphology at low concentration and intercalated morphology at higher concentrations. The nanocomposites exhibited exceptional antibacterial activities of >99.9% in colony counting method against both gram-positive and gram-negative bacteria, making it suitable for polyethylene commodity applications where infection control is a major issue e.g. kitchen dustbins, water storage tanks, crates, buckets etc.