According to a report by German newspaper "Die Welt," Volkswagen has reached a deal with American authorities to settle a legal case in US federal court sparked by the Dieselgate scandal.

As part of the agreement, VW would pay each customer affected by the carmaker's use of emissions test cheating software $5,000 (4,400 euros), in addition to paying to repair their vehicles, according to sources close to the negotiations.

Nearly 600,000 diesel cars in the US had the cheating software installed. According to sources cited by Reuters, VW will offer to buy back some of the affected vehicles from customers.

Volkswagen has yet to issue a comment.

Narrowly avoiding a trial

News of the agreement comes just one day before the deadline imposed by US District Judge Charles Breyer for the company to present a feasible plan to take care of the damages caused by its deception. Failure to do so would have likely resulted in a trial over the summer. VW already had the deadline extended last month.

The US Environmental Protection Agency (EPA) was involved in the investigations, tasked with evaluating the company's commitment to making up for damage done by excess emissions. The US Department of Justice is involved as well.

"Die Welt" said that the plan does not go into detail on how VW plans to fix the cars or distribute compensation. Specifics are expected to be decided in the coming months.

Reuters reported earlier on Wednesday that VW decided to increase the money it has set aside to pay for the consequences of the cheating scandal. It currently has $7.6 billion earmarked.

Stocks for the company jumped on Wednesday, thanks to confidence that such a deal would be reached in time. Still, VW shares have lost billions of dollars in value since the cheating software was revealed in September.

Audi origin?

Germany's business newspaper "Handelsblatt reported Wednesday that the software was not developed at Volkswagen's headquarters in Wolfsburg, near Hannover, but around 1999 at the concern's upmarket sister brand Audi.

The software switched motors into so-called "acoustic mode" that dampened the charactistic diesel knocking sound but pushed nitrogen oxide emissions beyond pollution limits.

Audi, located at Ingolstadt in Bavaria, never implemented the software in its cars, Handelsblatt said, quoting a "concern insider."

But, six years later, techicians at Wolfsburg allegedly drew on the software concept while developing Volkswagen's then-new diesel motor, the so-called EA 189.

Handelsblatt said Audi and VW declined to comment on its lead story.

jtm/dk, ipj (dpa, Reuters)