THE row over Liverpool’s bid to use £21m of taxpayer handouts to grab a slice of Southampton’s lucrative cruise trade could end up in the European Union’s anti-fraud office, a Hampshire MEP has said.

The European Commission’s former chief accountant turned MEP Marta Andreasen, pictured, said Liverpool’s plan to get a ban of “turnaround”

cruises lifted without paying back £9m of European grants could lead to an investigation into “misuse”

of European funding.

Liverpool City Council received the cash for its Pier Head cruise terminal on the strict condition, laid down by the Department for Transport, that it would only be used for visiting calls from cruise ships, although internal North West Development Agency emails at the time suggest Liverpool had always planned to use the new terminal to start and finish cruises.

Ministers are now weighing up whether to remove the condition if Liverpool pays back just £5m of its public funding.

A campaign by Southampton and other UK cruise ports demanding full repayment of the grants to avert unfair competition resulted in a 10,000 name petition, which was handed into Number 10.

Mrs Andreasen, a UKIP MEP who has met Southampton port bosses to see how the city economy and thousands of jobs could be threatened by Liverpool’s plan, said: “The fact they are changing the condition means they don’t qualify any more to get that [European] money.

“The condition was put on the project in general terms. For that reason the EU agreed to co-fund the project.”

Mrs Andreasen, who sits on the European Parliament’s budgetary control committee, said she would be calling for an investigation into a possible “misuse of EU funding”.

She has also tabled questions with the European Commission about unfair competition and repayments of the European funding.

“It could get to the point of an investigation by OLAF,” she added, referring to the body responsible for fighting fraud against the financial interest of the EU.

Liverpool has not offered to repay any of the £9m of regional development funding from Europe.

The DfT has said Liverpool would have to accept any financial risks of a subsequent finding the partial payback plan contravened EU state aid rules.

Transport minister Mike Penning said: “It is for Liverpool to satisfy the European Commission, if necessary, that having regard to the continuing regional benefits from overall operations at the terminal, no parallel repayment of European funding is required.”

A spokesman for Liverpool City Council said: “The reason we are not proposing to pay back the EU grant is because there is no overriding legal requirement for repayment of it.”

Southampton has spent millions of private sector cash strengthening the city’s position as the cruise capital of northern Europe, with about 360 cruise ships expected to visit the city this year – worth more than £400m to the local economy.