THE MAYOR of Liverpool has told Southampton to back off in the bitter row over cruise funding.

Southampton leaders are furious that Liverpool is already operating lucrative 'turnaround' cruises at its publicly funded £21m terminal despite the issue of state aid it received yet to be settled.

But Liverpool mayor Joe Anderson promised to tell European competition authorities about Southampton’s own public funding and told the Daily Echo: “We won't be dictated to.”

Southampton council leader Richard Williams accused him of unhelpful “megaphone diplomacy” and said Southampton would continue to fight for fairness.

The Merseysiders have pledged to pay back £8.9 million - but no money has been handed over so far and ministers recently criticised Liverpool for not making any move to settle the bill.

Meanwhile, the European Commission has yet to decide whether the arrangement complies with competition laws. And there has been no offer from Liverpool to repay £8.6 million of EU funds it received.

Speaking at the Labour Party conference in Manchester, Mr Anderson told the Daily Echo he was waiting for the Government to tell him which department to give the cash to.

He said: “We are co-operating with the European Commission. They are talking to us.

“Whatever they say, we will abide by it. We will do nothing illegal.”

The cash will be paid as an up-front payment rather than £12.6 million in instalments, he confirmed.

He added: “I get a little bit frustrated with Southampton and other ports, which have had millions of pounds of subsidy from the EU to support their port and improve access.”

Asked whether it was unfair that turnaround cruises had restarted with the matter still to be resolved, Mr Anderson said: “Why shouldn’t we? If the UK Government sees no issue with us, we’re not going to be told by Southampton that we can’t do it.

“We will be told by the people who make laws in that regard. We won’t be dictated to by anyone.”

Cllr Williams said: “In Southampton we follow the rule of law and will continue to do so. I don’t think megaphone diplomacy works. There will have to be a fair outcome of this and I think he’s wrong.”

He added: “We are standing up for fairness and the people of Southampton and objecting to what is demonstrably unfair state aid and will continue to do so.”

Jimmy Chestnutt, chairman of the UK Cruise Port Alliance and chief executive of the Hampshire Chamber, added: “Cllr Anderson knows that he has to pay back and should pay back the monies if he wants those restrictions lifted and in our view he has got off lightly having had the money for some time and not having had to pay interest and not yet paid back the subsidy from Europe.”

“Our issue has always been one of unfair subsidy and not competition.”