FILE PHOTO - Audi CEO Rupert Stadler arrives to the company's annual shareholders meeting in Ingolstadt, Germany May 9, 2018. REUTERS/Michael Dalder

HAMBURG (Reuters) - Volkswagen's VOWG_p.DE supervisory board on Friday deferred a decision on the future of Rupert Stadler, the suspended chief executive of its premium brand Audi NSUG.DE, a person familiar with the matter said.

German daily Handelsblatt reported earlier on Friday that the board had held off because of an imminent decision by the German government on how to tackle pollution from diesel vehicles.

Given that Germany’s auto industry has rejected a proposal to lower the emissions of older diesel vehicles with hardware retrofits as too costly, it would be poor timing to spend millions of euros to buy Stadler out of his contract, which was extended by five years last year, the report said.

Stadler was forced to step down temporarily after he was taken into custody in mid-June on suspicion of interfering with an emissions investigation. Sales executive Bram Schot is acting as interim replacement.

Both VW and Audi have said that Stadler is presumed innocent unless proven otherwise.

In July, Volkswagen recruited BMW BMWG.DE engine development and purchasing expert Markus Duesmann, who has been touted as a potential successor to Stadler as VW looks for clean-engine expertise to help it shake off the emissions scandal.