EU Commission president Romano Prodi has delayed legal action aimed at removing the state of Lower Saxony's power to veto any takeover of VW.

Mr Prodi has stayed the impending legal action in the European Court of Justice so that his officials can undertake further legal analyses.

The action is a pioneer case in the ultimate development of a European 'Takeover Code'.

European single market commissioner Frits Bolkestein said he believes the 'VW law' will go.

“I consider this to be a barrier, an obstacle to the free movement of capital within the EU.”