An Audi spokesman told Spiegel Online that of the 2.1 million Audis affected, 577,000 were registered in Germany, out of a total of 1.42 million affected cars in western Europe.

The Audi cars affected include A1, A3, A4, A6, TT, Q3 and Q5 models fitted with 1.6- and 2-litre turbodiesel engines.

Only engines that were tested under the EU 5 emissions standards were fitted with the cheating software, while newer cars tested under EU 6 are not affected.

German authorities at the Federal Motor Transport Authority (KBA) have given VW until October 7th to submit a timetable for a technical fix for vehicles fitted with the test-dodging software, a spokesman said on Monday.

11 million cars worldwide

Eleven million cars worldwide produced by Volkswagen Group (VW), which owns a slew of mass-market and luxury brands including Porsche, Skoda, SEAT, Bentley, Bugatti and Lamborghini, were fitted with the software.

So far the company has admitted that Audi, Skoda, and SEAT cars, as well as some light utility vehicles produced by other VW subsidiaries, used engines including the so-called “defeat device”.

Designed to detect when the cars were undergoing regulatory testing, the program built into the car's on-board computer would temporarily reduce emissions of nitrous oxides, which are harmful to human health and the ozone layer, by up to 40 times.

Volkswagen Group's stock price had already fallen by more than seven percent in morning trading on Monday before the news broke.