The European Investment Bank (EIB) has decided to suspend loans to Volkswagen.

EIB President Werner Hoyer told reporters loans will be put on hold while it investigates if previous funding could be linked to the car manufacturer’s emission test cheating scandal.

The EIB is examining if a €400 million (£304m) loan it awarded to the car manufacturer in 2009, which was repaid in 2014, may be connected to the scandal, Mr Hoyer said at a press conference.

He added: “We were astonished, disappointed and we are now concerned about the allegations, including indications by senior company executives of improper and possibly fraudulent behaviour.

“To be on the safe side, we have decided to put on hold any new lending to Volkswagen at the latest within one year.”