The European Commission has ruled that public funding worth £17.8m granted for the construction of the Liverpool cruise terminal is in line with EU state aid rules.
Following a complaint from the Port of Southampton the Commission started to examine the financing of the new cruise terminal in Liverpool in 2011. The project was coordinated by the Liverpool City Council and received funding from the UK government of £9.2m and £8.6m from EU Structural Funds.
The project could not be carried out without public funding, with a financial analysis showing that the terminal operator's income would be insufficient to cover the investment costs.
On its ruling, the European Commission said: "The investment will allow for a better exploitation of sea transport services, particularly in the cruise industry. The Commission found that the positive effects of the project will outweigh any potential distortions of competition brought about by the aid.
"The Commission therefore concludes that the project is in line with Article 107(3)(c) of the Treaty on the Functioning of the European Union (TFEU), allowing state aid for the development of certain economic activities."
Cllr Joe Anderson, Mayor of Liverpool, said: "We were confident of our position and are disappointed that the biggest UK cruise liner port felt it necessary to ask the European Commission to investigate, especially as the Port of Southampton has benefitted from public investment in infrastructure which has enabled it to grow to its current position."
Liverpool's cruise terminal was opened in October 2007 and built with the help of grants from the North West Regional Development Agency and the European Regional Development Fund.
The landing stage was built on condition it did not compete for turnaround cruises with other UK ports. In May 2012, the government agreed to lift this if a portion of the grants were repaid.