Germany’s ministry of transport rejected claims it had been aware of the emission rigging practices at Volkswagen ahead of the revelations by the US Environmental Protection Agency last week, on the same day that Volkswagen chief executive Martin Winterkorn resigns from his post.
Although the German government acknowledged earlier this year there has been a well-documented gap between the test and on-road emissions, it denied it had any information about the car-maker using technology to cheat in the measurement tests.
The practice involves use of special software, know as the 'defeat device', which detects the car is being tested and initiates an action designed to reduce emissions for the time of the testing. It can switch the engine to economy mode or even inject chemicals to cut emissions to comply with legal limits. It has been said real emissions could be up to 40 times higher.
"There is obviously a system of fraud and lies," said Oliver Krischer, a Greens party lawmaker. "I assume that the minister was informed that such manipulative devices were used.”
Krischer and his Green party colleagues have challenged the government earlier this year about the discrepancy between emissions in the test environment and real levels.
The government acknowledged it knew about the existence of the gap and said it was seeking tighter rules.
"I have made it very clear... that the allegations of the Greens party are false and inappropriate," transport minister Alexander Dobrindt said on Wednesday. "We are trying to clear up this case.”
A German government spokesman added: “Through the improvement and reconfiguration of the measurement process, through the fixing of far lower tolerance levels as well as using conditions that are closer to reality, the aim is to get a more representative result."
Today, Volkswagen’s representatives have admitted there could be up to 11 million vehicles worldwide with the emission-cheating technology on board.
The firm is facing a massive wave of recalls and a fine in the US of up to $18bn (£11.6bn).
According to Volkswagen, the software has been installed on type EA189 engines
"A noticeable deviation between bench test results and actual road use was established solely for this type of engine," the carmaker stated, adding it was ‘working intensely to eliminate the deviations through technical measures.’
The firm further said it was setting aside a provision of some €6.5bn (£4.7bn) recognised in the profit and loss statement in the third quarter to address the issue.
Brussels-based campaign group Transport and Environment claimed the technology used in VW's cars was also utilised by other manufacturers.
According to Tim Barlow, air quality expert at the Transport Research Laboratory, the European emission lab testing system developed in 1996 is severely outdated, providing too much room for error and optimisation.
"Ideally we need to move towards a testing model that's based on real driving emissions, carried out with vehicles operated on normal roads,” Barlow said.
"This should be followed up with in-use compliance testing, whereby a sample of vehicles already in use is tested to check they still comply with the emissions limits."
According to Monique Goyens, director general of European consumer organisation the BEUC, the EU lacks an independent on-the-road surveillance system that would ensure car manufacturers comply with the regulations.
"The EU needs to implement such a system to restore trust amongst consumers in emissions and fuel consumption test programmes," she said.
As a direct consequence of the diesel emissions scandal, Volkswagen chief executive Martin Winterkorn has today resigned his post.
Mr Winterkorn announced he was stepping down but was not aware of "any wrongdoing on my part".
He issued a statement which read: "I am shocked by the events of the past few days. Above all, I am stunned that misconduct on such a scale was possible in the Volkswagen Group.
"As CEO I accept responsibility for the irregularities that have been found in diesel engines and have therefore requested the supervisory board to agree on terminating my function as CEO of the Volkswagen Group. I am doing this in the interests of the company even though I am not aware of any wrongdoing on my part."