Brussels  - The European Commission is to take Germany to court over its failure to modify the so-called "Volkswagen Law," which has been found to break the European Union's competition rules, officials in Brussels said Tuesday.

A spokesman for the EU's internal market and services commissioner, Charlie McCreevy, said the commissioner planned to make a proposal to this effect "as soon as possible."

The EU executive had asked Germany to amend the law in the light of an October ruling by the European Court of Justice, which had found that the 48-year-old legislation breaks EU rules.

A German government response, delivered to Brussels in August, had failed to address the EU's concerns.

"The facts are clear: they are not changing their positions," McCreevy's spokesman, Oliver Drewes, told reporters in Brussels.

The so-called "VW law" allows the state of Lower Saxony to hold veto powers in Volkswagen's board despite holding less than the required 25 per cent or more of shares in the company.

The German-EU arm-wrestling exercise was prompted by Volkswagen's main shareholder, Porsche, which is seeking to limit the influence of Lower Saxony over the company. (dpa)