Liverpool Culture Company says it had "no choice" but to partially cover a piece of artwork because the building it is on is in "serious disrepair".
Half of the Banksy Mural is covered with hoardings
The graffitied rat by renowned artist Banksy formed part of the 2004 Liverpool Biennial and is hailed as an attraction for Capital of Culture.
Visitors to the city complained that it covered up an interesting and exciting piece of art.
The Culture Company said the lower part was covered to improve its appearance.
"We are committed to improving the appearance of high profile grot spots in the city.," said the company.
"The former White House pub is in a state of serious disrepair. We have painted round the upper part of the mural to preserve it.
"Unfortunately, the lower part of the artwork was in such a poor state that it was beyond repair and we felt we had no choice but to erect the hoardings.
"We consulted with figures in the city's artistic community before taking this action and believe we have found the best possible solution in terms of preserving what we could of the artwork."
The former White House pub, which is now derelict, has been identified by council bosses as one of a number of buildings to be covered by artwork to detract from the eyesores for the Capital of Culture year.