LIVERPOOL has paid back the public cash used to build a terminal the city hopes will allow it to compete with Southampton for lucrative cruise business.

The Merseyside city's mayor today confirmed the £8.8m of taxpayers' money demanded back by the Government has been paid in full.

It comes after criticism from rival ports, including Southampton, that it was unfair Liverpool be able to tout itself as a start and finish point for cruises through its publicly-funded £21m Pier Head terminal.

Port and business leaders, as well as politicians, argued it gave Liverpool an unjustifiable advantage over cities like Southampton, which have developed their docks through private investment.

After a long-running public battle, dubbed “Cruise Wars”, the then-Shipping Minister Mike Penning earlier this year ruled the north-west city must pay back most of the £9.2m Government grant it had received if it wanted Pier Head to be used for “turnaround” cruises as well as “day call” ones.

Liverpool attracted further criticism by launching turnaround cruises immediately after the decision, and without a penny being paid back, but the city's mayor Joe Anderson today said the bill has been settled in full.

He said: “We agreed to abide by the ruling of the independent arbiter and pay the money back, and that is exactly what we have done. As soon as the Government gave us details of how they would like the payment to be made, we arranged for it to be settled promptly.

“The cruise liner terminal is proving to be a huge success and we have had extremely positive feedback from operators and passengers.

“It provides a big boost to our tourism industry - creating and sustaining many jobs.

“Liverpool has an unrivalled maritime history and we are now on the way to restoring our reputation as a leading cruise destination.

“For far too long, holiday makers in the north have had to travel to and from other places to start their journeys, and this is helping to return Liverpool to its rightful place as a major cruise port.”