The Volkswagen Group has terminated the contract of former Audi chief executive Rupert Stadler following his arrest two months ago in connection to his alleged role in the dieselgate scandal.

The supervisory boards of the VW Group and its up-market Audi business confirmed that Stadler’s contracts would be terminated “with immediate effect” because “he is unable to fulfil his duties”, the Financial Times reported.

An official statement issued by the Volkswagen Group said that Stadler "wants to concentrate on his defence".

Stadler’s private apartment was raided by Munich prosecutors on June 18 and he has remained in pre-trial detention since that date, but charges have yet to be made against him.

He is being held in Ausberg and is in pre-trial detention.

Back in July, Hiltrud Werner, the Volkswagen Group's head of integrity and legal affairs told the Financial Times that Stadler should not lose his job following his arrest.

Werner said: “I can only talk for myself, if someone is humiliated in this way, I think there is no need for a supervisory board to humiliate him further.”

Werner added that Stadler “had offered many, many times to step down in the last two years”.

Abraham Schot stepped in as interim chief executive at Audi two days after Stadler’s arrest in June.

Stadler joined Audi in 1990, was made a board member in 2003 and became chief executive in 2007.

He also sat on the management board at Volkswagen and earlier this year was promoted to head of sales across the VW Group.