LIVERPOOL Council must pay back millions more to the government before it can win lucrative rights to launch liners from the River Mersey Pier Head, it was announced today.

The department for transport (Dft) formally rejected the Liverpool  council’s proposal to refund only £5.3m of the £9.2m grant it received to build its cruise terminal.

The door is still open to lifting the ban on 'turnaround' cruises - which would begin and end at Pier Head - but it will require a bigger payback.

An independent expert has been called in to decide how much of the £9.2m must be repaid - and to try to settle the bitter dispute between Liverpool and Southampton.

The blow was confirmed in a written statement to MPs, by shipping minister Mike Penning, which rejected "the phased repayment of £5.3m of grants".

It said: "I find that there are persuasive arguments that this level of repayment would be insufficient to reflect the adverse impact on competition with other ports.

"I therefore intend shortly to seek independent advice on a more appropriate figure."

The statement added: "Meanwhile, turnaround cruise operations continue to be permitted at Langton Dock in Liverpool."

The move - first revealed by the Post as the likely outcome - leaves Liverpool’s Labour leader Joe Anderson with a dilemma.

Mr Anderson threatened legal action against the government if it rejected the £5.3m offer, insisting the Dft had shaken hands on a deal
at that price.

The delay forced by independent arbitration will also frustrate efforts to carry out upgrading work in time for cruises to launch this summer.

Ministers remain keen to give Liverpool the potential bonanza of ‘turnaround’ cruises - which the city council believes could each deliver a £1m economic boost.

But they have been forced onto the back foot by the ferocity of the response from rival ports, particularly Southampton, but also on the Tyne.

Also in the background is the unresolved issue of the separate £8.6m grant that Liverpool received from the European Union to build the
terminal.

The Post understands repayment has not been required in similar cases, but today’s statement said: "As Liverpool City Council is aware, turnaround operations would also require State Aid clearance from the European Commission."