There are fears millions of pounds of trade could be lost at the Port of Tyne following a decision allowing Liverpool to compete for cruise ship business.
The Merseyside port was allowed to build a new cruise terminal with Government funds on conditon it would not host specific cruises starting and finishing their route there.
Up to now, strict rules have prevented publically funded terminals bidding for lucrative turnaround cruises which start and finish at a number of UK ports.
But now, if Liverpool pays back what it owes to the Government, it can compete for trade that's worth 45 million pounds and 1000 jobs on Tyneside.
Steve Roberts from the Port of Tyne says it's a major threat to the UK's Port of the Year, even though it's having its busiest season on record.
"I'd be lying if I said we weren't concerned by competiton from elsewhere, having said that, we can have 95 percent fo the world's fleet of cruise ships here, we have a lot to offer and can build on our success too."
One in eight holidays are now cruises, and ministers maintain the decision is healthy for the industry - which is growing fastest in British waters.
Transport Minister Mike Penning said, "competition, as long as it's fair competition, doesn't hurt anybody and that's why it's made this country so great, but there's great plans for the port of Newcastle and the Tyne. I want deep water wharfs there, we've got some contamination issues - work with us on that - but actually, the cruise situation won't affect them, I don't think".
North East MEP Martin Callanan says European loans totally 9 million pounds should also be repaid.
"The legal agreement said that they would not use this grant funding to build a cruise terminal that would have turnaround cruises because that is unfair competition to other ports that have not received that funding. And within a year or two after they signed the agreement, once they had the terminal built, they immediately wanted to have the condition lifted. I think that's frankly quite disreputable behaviour on the part of Liverpool", he said.
Liverpool chiefs have been told they can repay 8.8 million pounds in state aid in a lump sum or 12.6 million if phased over 15 years, for the chance to take cruise ship work from Tyneside.