A Southampton Euro MP last night demanded that the Government orders Liverpool to pay back all European funding in a state aid row over its turnaround cruises bid.

The Merseyside city has asked the Government to lift a ban on starting and finishing cruises at its £20m publicly funded Pier Head cruise terminal.

In return it has offered to pay back only £5.3m – over 15 years – and none of a £9m European grant.

Southampton and other ports, which have built up lucrative turnaround cruise operations with private investment, are demanding full repayment for fair competition.

Last night the Department for Transport, which promised a decision by the end of the month, remained tight-lipped on when it would be made, although the Daily Echo understands that an announcement by shipping minister Mike Penning could come today.

Mr Penning last week said that the turnaround restriction would be lifted if all taxpayer funding was repaid, but claimed that the £9m European Regional Development Fund grant was a matter for the European Commission that would have to be settled separately.

South East MEP Daniel Hannan, right, said: “I was glad to hear that the shipping minister thinks all of the public money used to build the City of Liverpool Cruise Terminal should be repaid before turnaround operations can begin.

“I hope the minister agrees that this repayment should include the European funding as well as the domestic, since both came from UK taxpayers’ pockets and both constitute state aid under EU law, which the UK Government has a legal duty to enforce.

“It would be unacceptable to see the Government abdicating responsibility for something over which it still has clear competency.”

The European Commission has warned Liverpool that “a financial correction could not be ruled out” in response to a question from fellow southeast MEP Marta Andreasen.

Almost 12,000 concerned residents of cruise ports across the UK signed a petition against Liverpool’s proposals.

Jimmy Chestnutt, chairman of the UK Cruise Port Alliance, said: “It’s time to put a stop to this once and for all and either insist Liverpool pays back all the money, including the £9m of matched funding from the EU, or abides by the conditions that it agreed when it accepted the money in the first place.”

Today’s expected announcement may not provide a definitive verdict, meaning that the dispute could drag on.

Liverpool City Council insists that its repayment offer is a “fair price”.