BRUSSELS has warned Liverpool may have to pay back up to £9m of European funding if it pushes ahead with its controversial plans to muscle in on Southampton’s turnaround cruise trade.

The European Commission has warned that “a financial correction could not be ruled out” if the condition that Liverpool cannot use its Pier Head cruise terminal to start and finish cruises is lifted.

In response to a question from Hampshire Euro MP Marta Andreasen the Commission said it would ensure that state aid rules, which restrict public money being used to support private industry, are “fully respected”.

The Department for Transport (DfT) is deciding whether to lift the turnaround ban if Liverpool pays back over 15 years just £5m of UK public funding used to build its £21m City Cruise Terminal.

Mrs Andreasen said the Commission’s statement was “positive” news for Southampton and would encourage the DfT to reject Liverpool’s proposal.

A major campaign across UK cruise ports, spearheaded by Southampton, resulted in a 12,000-strong petition being presented to Downing Street calling on the Government to refuse Liverpool’s application unless all the taxpayer funding is repaid.

Mrs Andreasen said: “The Commission has clearly recognised that the [turnaround] condition was set for the whole [European co-funded] project. If that condition changes there has to be a financial correction”.

She said the Government, which has agreed to consult the Commission if it lifts the ban, would have to account for “improper use” of European structural funds if they were not paid back.

The news comes despite Liverpool leaders’ claims Europe would not want any of its grant back.

Jimmy Chestnutt, chairman of the UK Cruise Port Alliance, an industry lobby group, hailed the development as “a good first step”.

“This is a hammer-blow to Liverpool’s argument that it should be allowed to repay just a fraction of the public money it has received to build the terminal.

‘Jobs endangered’ “No one objects to fair competition, but Liverpool’s proposal to use taxpayer’s money to compete with private investment endangers thousands of jobs in other ports across the country.

“Each cruise ship visit can be worth as much as £2m to their home ports, where an army of suppliers, hoteliers, restaurateurs and taxi drivers are employed to service them”.

A previous bid by Liverpool to lift the turnaround ban was rejected in 2009 by the then Labour Government as amounting to unfair competition.

A Liverpool City Council spokesman said: “We are still awaiting the outcome of the consultation for our application for a turnaround facility at the Cruise Liner Terminal. It would be inappropriate to comment further at this point.”