Liverpool's bid for the Pier Head to be used as a start and finish dock for Cruiseliners is being opposed by Southampton.
The Department for Transport are consulting on whether rules can be relaxed to allow a full "turnaround" facility to be created at Liverpool's Cruise Liner Terminal.
The DfT has to give its approval because of a £9m grant from the European Union that helped fund the £20m terminal.
But Associated British Ports, which owns Southampton, believes it would amount to unfair help that would "distort" competition in the port sector.
ABP have written to the DfT and shadow Home Secretary Chris Grayling, who has lobbied for Liverpool, to protest at the proposal.
But Mr Grayling, who is also the Conservative spokesman for Merseyside, expressed that he does not believe the two locations were in competition, and he urged the DfT to agree in Liverpool’s favour.
Nearly 300 cruise liners call at Southampton a year, whereas Liverpool's terminal is due to received only 16 this year.
A council study has recently revealed the terminal will have brought in £13.6m to the local economy in its first two full years of operation, 2008 and 2009.
In total, 55 ships will have visited by the end of the year, 29 cruise vessels and 26 from the Royal Navy.
Passengers and crew's spending accounts for £2m, while the rest of the economic impact comes from money spent by the 370,000 spectators estimated to have turned out to see visiting ships.
A council report reveals the terminal is currently making a £250,000-a-year loss for the city council.
But it adds: "Although it continues to operate at a net loss, this is counterbalanced by the economic and publicity benefits to the city."
The issue of upgrading Liverpool's Cruise Liner Terminal follows criticism over the current facilities for voyages starting or ending their journeys in Liverpool.
As there are no baggage handling facilities, Customs, or immigration at the Cruise Liner Terminal, voyages starting or ending in the city have to use Langton terminal, in Bootle, which is in a heavily industrialised area.
The new terminal is more visitor-friendly, in the shadow of the historic Three Graces.
A spokesman for Associated British Ports (ABP) said: "ABP is opposed in principle to the use of public funds which distorts competition in the ports sector.
"ABP will be responding to the DfT consultation process which is currently under way in relation to this matter."
Southampton's Conservative council leader Alec Samuels said: "The city council most strongly supports our port.
"If there is anything we can do to support the docks, we will do and will continue to do."
He said each time a liner docks in Southampton it was worth around £1m to the city's economy.
Mr Grayling said: "ABP have written to me saying they are not happy. They have clearly got a particular commercial perspective that I understand.
"But there are times when we do things that don’t necessarily conform to a conventional commercial model.
"I am not persuaded that Southampton and Liverpool are really in competition."
Liverpool Labour leader Cllr Joe Anderson said the city needed "to lobby persuasively."
He said: "Liverpool and Southampton are completely different ports and offer different things."
Liverpool's tourism leader, Liberal Democrat Cllr Gary Millar, agreed.
He said: "I don't think Liverpool and Southampton can really be compared.
"They are so far away and I don't think Liverpool would be taking business away from Southampton."
stephen Maxwell, wirral around 2 years, 7 months ago