Patrick McLoughlin, the Transport Secretary, demanded a European Commission investigation and said Britain will be pushing for “action at a European level for more accurate test that reflect driving on the road”.
Shares in Europe’s biggest carmaker plunged almost 20 percent on Monday after it admitted using software that deceived U.S. regulators measuring toxic emissions in some of its diesel cars.
The stock tumbled another 20 per cent to a four-year low on Tuesday after some countries in Europe and Asia said they would launch investigations themselves.
Volkswagen said it would set aside €6.5 billion ($7.3 billion) in its third-quarter accounts to help cover the costs of the biggest scandal in its 78-year-history, blowing a hole in analysts’ profit forecasts.
Martin Winterkorn, the VW chief executive, has said that he is “endlessly sorry” for the “manipulation” involved but currently remains in post.
In a video statement on the company’s website, he said it had “betrayed the trust” of millions of people.
He added: “Swift and comprehensive clarification has now utmost priority.
“To make it very clear, manipulation at VW must never happen again.”
Volkswagen sold 10.1 million cars in the whole of 2014.
The U.S. Environmental Protection Agency (EPA) said on Friday Volkswagen could face penalties of up to $18bn (£11.7bn) for cheating emissions tests.
Chancellor Angela Merkel calling for “complete transparency” from a company long seen as a beacon of the country’s engineering excellence.