A SECOND bid by Liverpool to grab a slice of Southampton’s lucrative cruise trade will be put out to|consultation, the shipping minister has signalled.

The Mersey city has submitted a plan to pay back part of a £21m public handout so it can start and end cruises at its Pier Head terminal.

The terminal was built with public cash, including £9m in European Union grants, on the condition it would be used for calling cruises.

Now, the shipping minister has suggested a consultation will be launched soon to review the ban after Liverpool City Council proposed paying back only part of the funding it received from the UK Government.

Mike Penning said he was keen to ensure ports were free to compete on a “level playing field” but confirmed: “There are still some technical issues to be dealt with, but Liverpool’s submission to me is grounds to go ahead and consult with other parties.”

He added: “The city council is proposing to pay back a percentage of the state aid it received for the terminal, which is what I said would be necessary when I came to Liverpool.”

The Department for Transport said it was considering Liverpool’s submission, and would not give details last night of any forthcoming consultation.

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

Port bosses and politicians argue lifting the “turnaround” ban without paying back the £21m would give Liverpool an unfair advantage, amounting to a state-funded subsidy.

Southampton port director Doug Morrison said: “We believe in fair competition and want that commitment to continue.

“That clearly means asking for the full £21 million to be paid back to taxpayers before any change of use can go ahead.

“Anything else would be unfair.”

As the Secretary of State for Transport told Parliament last year, public money was used to build the City of Liverpool Cruise Terminal on the 'explicit understanding' it would not be used for turnaround.

"Just one year after it was built, Liverpool City Council and Peel asked for the fair competition condition to be lifted. After being turned down once, they're asking again.

"But the current Government also fully understands why the current restriction is in place and therefore why all of the money should be repaid.

We trust the Government to stick to its principles."