FILE - In this May 23, 2011 file photo Martin Winterkorn, CEO of Volkswagen, participates in a news conference at New York's Museum of Modern Art. Winterkorn promised full cooperation with the government following the company's admission it rigged nearly a half million cars to defeat U.S. smog tests. (AP Photo/Richard Drew)

Germany has been accused of knowing that Volkswagen was ‘rigging’ its emissions data and did nothing to stop them.

The allegations were made by the German Green Party, who claims a written response in July from the country’s Transport ministry shows the government was aware the car company was capable of falsifying its emissions tests.

“The government told us in July that it knew about this software, which has been used in the USA, and it’s clear they knew the software was widely in use,” Oliver Krischer, the deputy leader of the Greens told N24 television.

“The government worked with the auto industry, not to see that emissions levels were reduced, but so that the measuring system was set up to allow the cars meet the necessary standards on paper,” Mr Krischer alleged.

Expand Close Michael Horn, President and CEO of Volkswagen Group of America, speaks during the 2016 Volkswagen Passat reveal in the Brooklyn borough of New York September 21, 2015. Volkswagen U.S. head on Monday said he was confident the German automaker would restore customer confidence after it "totally screwed up" by rigging emissions tests of diesel-powered vehicles in the United States. Michael Horn vowed to make amends at a lavish event in New York to promote the 2016 Passat where the carmaker doled out German beer, pretzels and "cheddary ale fondue" to dealers and the media, before a performance of rockstar Lenny Kravitz. REUTERS/Darren Ornitz TPX IMAGES OF THE DAY REUTERS / Facebook

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Whatsapp Michael Horn, President and CEO of Volkswagen Group of America, speaks during the 2016 Volkswagen Passat reveal in the Brooklyn borough of New York September 21, 2015. Volkswagen U.S. head on Monday said he was confident the German automaker would restore customer confidence after it "totally screwed up" by rigging emissions tests of diesel-powered vehicles in the United States. Michael Horn vowed to make amends at a lavish event in New York to promote the 2016 Passat where the carmaker doled out German beer, pretzels and "cheddary ale fondue" to dealers and the media, before a performance of rockstar Lenny Kravitz. REUTERS/Darren Ornitz TPX IMAGES OF THE DAY

Nearly €30bn has been wiped from VW’s market value after it was found to be using software that switched on fume-supressing technology during testing, allowing its cars to pass strict environmental checks, while still spewing out dangerous levels of nitrogen oxides on the road.

Despite sailing through lab tests, VW's cars were pumping out dangerous levels of toxins, some 35 times higher than the legal limit.

Millions of cars now face being recalled if the scandal is as wide-reaching as feared, and car owners could see performance drop dramatically if manufacturers are forced to install new technology to cut fumes.

It has emerged that the German Transport Minister Alexander Dobrindt mentioned the issue of rigging in July, in response to a question from the Green party.

Expand Close German Transport Minister Alexander Dobrindt arrives for a weekly meeting of the German cabinet at the Chancellery in Berlin on September 23, 2015. AFP PHOTO / JOHN MACDOUGALLJOHN MACDOUGALL/AFP/Getty Images AFP/Getty Images / Facebook

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Whatsapp German Transport Minister Alexander Dobrindt arrives for a weekly meeting of the German cabinet at the Chancellery in Berlin on September 23, 2015. AFP PHOTO / JOHN MACDOUGALLJOHN MACDOUGALL/AFP/Getty Images

“The federal government is aware of [defeat devices], which have the goal of [test] cycle detection,” the reply said.

The Greens asked if the ministry was aware of the deployment of defeat device software in new vehicles, and it replied again, saying: “We have no knowledge of this.”

Expand Close A giant poster with a faceless man is seen next to the headquarters of German car maker Volkswagen in Wolfsburg, central Germany, on September 23, 2015. Volkswagen chief Martin Winterkorn on September 22, 2015 offered his "deepest apologies" for the pollution-cheating scandal engulfing the auto giant and threatening to tarnish Germany's industrial reputation. AFP PHOTO / ODD ANDERSENODD ANDERSEN/AFP/Getty Images AFP/Getty Images / Facebook

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Whatsapp A giant poster with a faceless man is seen next to the headquarters of German car maker Volkswagen in Wolfsburg, central Germany, on September 23, 2015. Volkswagen chief Martin Winterkorn on September 22, 2015 offered his "deepest apologies" for the pollution-cheating scandal engulfing the auto giant and threatening to tarnish Germany's industrial reputation. AFP PHOTO / ODD ANDERSENODD ANDERSEN/AFP/Getty Images

The ministry added that it shared the European commission’s view that there are “no extensively proven means of preventing defeat devices”.

There was no specific question about VW and defeat device software from the Greens, and the ministry did not refer to the company.

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However, the ministry answered the question on July 28, prompting accusations that German authorities had been aware of the potential for cheating in the industry for months.

The Green party now claims that Angela Merkel’s government knew more than it has admitted.

Mr Krischer told the N24 TV station last night that: “The government had already admitted in July that there were ‘deficiencies’ in the measuring systems for car emissions.”

“The VW emissions scandal is the result of a policy in which environmental and consumer protection are no longer important, and tricks and deceits are accepted with a wink.”

German Transport Minister Alexander Dobrindt has denied that the government failed to meet its responsibilities on the issue.

"Again and again we conduct testing. If there are irregularities, we discuss them immediately with the auto manufacturer according to the rules," Mr Dobrindt told reporters.

An investigation is underway to see if “the vehicles in question were built and tested within the existing German and European legislation,” he added.

However, the claim that Mrs Merkel’s government knew VW was rigging its emissions tests were backed by a forum of German environmental businesses on Wednesday.

“The federal ministry of transport has not once checked the information provided by the manufacturer in recent in years,” Jürgen Resch, the head of Deustche Unwelthilfe, said.

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