Volkswagen has agreed to a draft $4.3bn (€4.09bn) settlement with authorities in the US relating to criminal charges leveled at the company for cheating in emission tests.

The manufacturer will also plead guilty to breaking US laws.

The company's shares have recovered this morning as it hopes that this agreement will allow VW to move on from the threat of further legal action in the US.

It's revealed that this payout could mean that the current provisions of more than €18.2bn which it has set-aside to deal with the scandal may need a top-up.

VW will also be subject to special supervision from US authorities for three years.

The deal is subject to approval by VW’s managers and supervisory board - they are expected to meet today.

The company has admitted that it cheated to fool emission tests. It has already paid $15.3bn to settle a civil suit involving 475,000 owners of affected cars in the US - and another $1.2bn to settle a lawsuit leveled by VW dealers - and a further $1bn to recall and buy-back vehicles.

On Monday thousands of drivers in the UK launched a class action lawsuit against the company.

EU rules mean that it is unlikely that drivers will receive individual pay-outs on this side of the Atlantic - instead they will be offered repairs.

These British drivers claim that they paid more for their cars because they thought they were buying 'clean' diesel cars.