A North East MEP says Liverpool's plans to start and end cruise holidays will affect business at the Port of Tyne.
The city council was given a £20 million grant to build a new terminal at Pier Head, which port chiefs want to use for turnaround cruises.
The move would normally breach state aid rules. But the Department for Transport has said it would allow the rules to be lifted if the council repays some of the money.
Conservative MEP Martin Callanan says the plans are "unfair" to ports who have not received similar funding, and that Liverpool should be forced to pay back the UK and EU grants in full before proceeding.
A decision to allow Liverpool to operate turnaround cruises has been criticised as unfair.
The city council was given a £20 million UK and EU grant for its new terminal at Pier Head in 2007. But strict rules mean't it could only run as a stop-off point, as it had been funded using taxpayer cash.
However, the Department for Transport has said Liverpool can now use the terminal for the start and end of voyages if it repays £8.8 million as a lump sum, or £12.6 million over 15 years.
The move has received widespread opposition from ports, including the Port of Tyne, who argue that it have a detrimental effect on business as holidaymakers head to the North West instead.
North East MEP Martin Callanan said Liverpool should be forced to repay EU money in full before continuing with its plans.
Liverpool City Council says it is still deciding on a repayment option.