German prosecutors have widened their probe of Volkswagen’s diesel emissions cheating scandal and are now investigating 17 employees, up from six employees previously, prosecutor Klaus Ziehe said yesterday.

“This is part of the diesel investigation. The number of suspects has risen, although none are from the management board,” Ziehe said in Braunschweig, near VW’s Wolfsburg headquarters.

Volkswagen’s chief executive Matthias Mueller yesterday told employees gathered at the Wolfsburg that the emissions scandal would inflict “substantial and painful” financial damage onthe carmaker.

The scandal would keep VW busy “for a long time”, the CEO said, adding the carmaker has made no attempts to conceal its wrongdoings.

Volkswagen last year set aside €6.7 billion to cover costs of recalling of about 11 million diesel vehicles globally.

We will this year, probably every now and then, be confronted with unpleasant news related to dieselgate

Volkswagen’s second-largest shareholder expects more “unpleasant news” to emerge from an emissions-test rigging scandal after the carmaker in September admitted to manipulating pollution tests in the US.

“We will this year, probably every now and then, be confronted with unpleasant news related to dieselgate,” Stephan Weil, Prime Minister of Lower Saxony, yesterday told a gathering of workers at Volkswagen’s main factory in Wolfsburg.

Europe’s largest automaker should be able to cope with the fallout of its manipulation, said Weil.

“The damage will, on balance, not be minor, as much as that can already be said today – but Volkswagen luckily has a strong economic substance,” Weil told the gathering, attended by thousands of workers.

Lower Saxony, which holds 20 per cent of VW’s common shares, has “no reason” to alter its commitment to the carmaker, Weil said.