The publicly funded client behind the new Museum of Liverpool has ended up paying out a £750,000 penalty after discovering the building spoils the view from one of the city’s famous Three Graces.

National Museums Liverpool (NML), which receives more than £18 million every year from the government in grants, was forced to shell out the cash after realising that the new building — designed by 3XN and AEW — blocks views of former dock offices from the Port of Liverpool Building.

The £72 million museum, which is due to open by next spring, has fallen foul of a little-known clause that dates back to 1963.

The then owner of the Port of Liverpool Building, the Mersey Docks & Harbour Board, sold the land for the new museum to the Liverpool Corporation — but insisted no new building there be higher than 40ft (12m) in order to protect its view of the nearby Pilotage office.

The sightlines issue only came to light halfway through the planning process, a report in the Liverpool Echo on Wednesday claimed.

Lawyers for NML had been expecting to pay £70,000 to Port of Liverpool Building owner, property firm Downing. But NML chose to make the penalty £750,000 up front, claiming it had “no option” but to pay up.

Downing said it had invested more than £10 million refurbishing the Port of Liverpool Building and added: “Downing has a duty to safeguard its investments.”

The development is the latest gaffe to hit the project following the furore over the dismissal of Danish firm 3XN by NML and its replacement with Manchester firm AEW.