A High Court judge's ruling seems to have failed to clear up a row between central government and councils in Sheffield and Liverpool over the size of European funding allocations to the regions.
Liverpool claims it has won and that the government's European funding budget is unlawful.
Lawyers for Liverpool City Region and Sheffield City Region brought a joint action arguing the reduction to funding in the two areas was disproportional compared to other areas.
Documents provided to the High Court showed that, according to the Government's own estimates, the European Commission calculated Merseyside's share of EU funding for 2014-2020 to be around €350m. However it chose to allocate only €202m, with the balance being allocated to other, mainly richer, areas of the UK.
Liverpool says the Judge agreed the Government breached its legal duty to have due regard to the need to, amongst other things, eliminate discrimination and advance equality of opportunity. He has ordered the Government to reconsider its decision.
Mayor of Liverpool and chairman of Liverpool City Region Cabinet, Cllr Joe Anderson, said: "The court has found that the Government has had complete disregard for its legal duty when making its decision. It is well documented that Liverpool is one of the most deprived areas in the country and as part of its process the Government should have fully assessed this to make sure there was no unfair discrimination when making its decision.
"The evidence presented to court shows that, based on the Government's own figures, ministers decided to allocate €150m less to Liverpool City Region and almost €90m less to South Yorkshire than they themselves had estimated our share of the UK pot to be."
However, a spokesman for the Department for Business Innovation & Skills said the judge ruled against Liverpool City Region and Sheffield City Region on all substantive grounds including methodology of the funding allocations, "so they may not receive any additional funding".
Michael Fallon, business minister, added in a statement: "I am pleased the High Court accepted all our main arguments – we have always said the structural funds allocations were sound. We are looking into whether our Equality Impact Assessment requires further work, and we hope to submit the final allocations to the European Commission in the next few weeks. This funding is important for jobs and businesses in Merseyside and the sooner we can get this money to all parts of the UK the better."
Anderson continued: "European funding is meant to tackle economic inequality, yet as the poorest area in the North West we were awarded far less funding per head than the rest of the region including wealthier areas such as Cheshire.
"The bottom line is that the Government took €275m of funding allocated to English regions such as Liverpool and gave it instead to Scotland and Northern Ireland. They had claimed this was to protect them from being disproportionately affected by funding changes, yet in percentage terms we have lost twice as much as they stood to lose.
"I have described it previously as Robin Hood in reverse – taking from the poor to give to the rich
Judicial review proceedings on behalf of the Sheffield City Region and Liverpool City Region were issued on 26 September and the formal case was submitted to the High Court on 15 October.
The case was considered by a High Court Judge sitting in Leeds last week and the ruling was published on Friday.