Volkswagen is hiring independent auditors to review allegations of bribery at Europe's biggest carmaker, the company said.

"We have contacted auditors KPMG and intend to commission them to review independently all that has happened," a spokesman quoted chief executive officer Bernd Pischetsrieder as saying.

VW has also asked German prosecutors to examine the allegations against former staff at its Czech unit Skoda.

Volkswagen's chief employee representative, Klaus Volkert, unexpectedly resigned as head of the group's works council after media reports said he may be linked to the scandal, but he insisted he had done no wrong.

Participants at a staff meeting said Mr Volkert, 62, had cited age as his reason for stepping down after 15 years at the head of the works council, one of the most potent in German industry.

Brunswick state prosecutor Klaus Ziehe said that his office had received complaints from VW accusing two employees of fraud and betrayal of confidence.

Volkswagen has said it was cooperating closely with the Brunswick prosecutors and would thoroughly investigate any evidence of improper staff activities that may have involved attempting to harm the company financially.

It has declined to comment, however, on the details of the case or the amount of financial damage that may have ensued.