FILE PHOTO: The logo of Volkswagen is pictured at the LA Auto Show in Los Angeles, California, U.S., November 20, 2019. REUTERS/Lucy Nicholson

BERLIN (Reuters) - Volkswagen VOWG_p.DE said it will compensate owners of its heavily polluting diesel vehicles in Germany in a settlement that will cost the German carmaker 830 million euros.

In 2015 VW was caught by regulators using manipulated engine management software to mask excessive pollution levels in its diesel cars, sparking a raft of prosecutions and lawsuits.

The offer comes despite a breakdown in talks with German consumer association VZBV, which had been in negotiations with VW about reaching a settlement deal .

“The failure of settlement talks with Consumer Association VZBV should not come at the expense of customers,” VW said in a statement, adding that all customers who had registered for compensation with VZBV would be eligible for the settlement.

VW said it had declined to reach a settlement with VZBV, blaming excessive demands for 50 million euros in fees by lawyers representing the consumer organisations.

VZBV said talks had failed because the carmaker had not guaranteed a system of redress which was adequate for consumers, adding it would continue to press for a settlement on VZBV terms through German courts.