A PLAN to let Liverpool pay back a portion of £21m it was given in taxpayer handouts in return for the city being allowed to become a start and finish point for cruises was launched today.

The Department for Transport (DfT) has opened a ten-week consultation proposing the north-west city pays back £5.3m over 15 years so cruises can start and end at its Pier Head terminal.

The terminal was built with public cash, including £9m in European Union grants, on a condition requested by the DfT that it would only be used for cruise ships calling in during voyages.

A bid by Liverpool City Council to get the “turnaround” ban overturned was rejected by the previous Labour Government two years ago as unfair competition.

Shipping minister Mike Penning said: “I consider that the repayment proposal by Liverpool City Council can be justified taking into account the prospective regeneration and other benefits to the Merseyside area and, on this basis, I am consulting on the possibility of removing the objection.”

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

Southampton port director Doug Morrison said: “It's farcical. The turnaround proposal would allow them to use the terminal for 42 per cent of the year. It's more than the Ocean Terminal (in Southampton) which is 36 per cent. That's no great hardship.”