LIVERPOOL could still be breaching Euro state aid rules if the UK Government gives it the go-ahead to muscle in on Southampton’s cruise trade, a Hampshire Euro MP has warned.

Former European Union (EU) chief accountant turned UKIP politician Marta Andreasen, accused Liverpool of trying to “cheat the system out of millions” in its bid to host the start and finish of cruises at its, partly-taxpayer funded terminal.

A consultation is under way on a |proposal by Liverpool City Council to repay just £5.3m of the £21m of taxpayer’s cash it received to build the terminal to remove a condition it was used as a port-of-call. It is proposing to repay none of the £9m it received from Europe.

Mrs Andreasen said: “From an EU perspective, I believe the European Commission needs to recoup their money less they be accused of promoting unfair competition and breaching their own state aid rules.”

She added: “The knock-on effect of Liverpool being a start port could be disastrous to Southampton costing it vital revenues and, possibly, jobs and commerce.”

Hampshire business leaders and politicians have demanded a level playing field and the repayment of all taxpayer grants before the ban on “turnaround cruises” is lifted.

Liverpool is alreadyplanning a £23m baggage handling facility and vehicular bridge – with £10m of public money going towards the terminal upgrade plans.

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

But dock owners ABP has revealed plans for a £30m fifth cruise terminal in Southampton may be delayed or scrapped depending on the result of a consultation.

Liverpool council leader, Joe Anderson, has volunteered to hold peace talks with Southampton.

Southampton port director, Doug Morrison, and council leader, Royston Smith, are preparing a joint approach to fight the plans.

Hampshire MPs, including Chris Huhne and Caroline Nokes, have made written objections.

Shipping minister, Mike Penning, said: “It will be for Liverpool City Council 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.”