The European Commission is set today to decide whether to pressure Germany to scrap a 1960 law insuring Volkswagen’s independence.

The so-called ‘VW law’ dictates that no shareholder can exercise more than 20% of VW's voting rights no matter how many shares they own, a rule that makes it difficult to mount a hostile takeover.

The law also gives VW's home state of Lower Saxony seats on VW's supervisory board to help safeguard state interests.

Volkswagen advisers warn that altering European takeover laws could leave the company vulnerable to a bid from Ford.

However, the European Commission told Berlin in March to scrap the VW law, which it said interferes with the free flow of capital and in effect gives Lower Saxony control of the company via a minority stake.

Germany, meanwhile, has said the law is vital to protect jobs.