Embattled German auto giant Volkswagen (Other OTC: VLKAF - news) expects to have to buy back around 115,000 diesel vehicles in the United States that are affected by the massive pollution-cheating scandal, the daily Sueddeutsche Zeitung reported on Thursday.

Quoting sources inside the company, the newspaper said that VW expected to have to buy back around one-fifth of the affected cars in the US, which totalled around 580,000.

Contacted by AFP, the carmaker refused to comment on the information.

The newspaper said the buy-back could take the form of either a cash payment or the owners would be offered a brand new vehicle in exchange at a large discount.

The US authorities would reach a decision on this in January, the report added.

VW is currently engulfed in a scandal of global proportions after it was forced to admit in September that it installed pollution-cheating software in 11 million diesel engines worldwide.

The number of vehicles involved in the US is estimated at around 600,000.

Earlier this week, the US government announced it is taking VW to court over the affair, dubbed "diesel-gate", which has hit the company's sales and could cost it countless billions of euros in fines and lawsuits.

In Europe, VW is scheduled to start recalling some 8.5 million affected vehicles in the region this month.