Porsche has increased its stake in Volkswagen to 27.4% for an undisclosed sum and suggested that it would raise it again soon.

The German sport car manufacturer bought 21.2% of VW over a year ago to protect it from hostile takeovers. Porsche hopes to raise its stake in VW further to 29.9%, still below the level needed to make its own takeover bid.

However, even if Porsche wanted to take control of VW its influence is limited by a 50-year-old law called the ‘VW law’. It prevents anyone other than Lower Saxony’s regional government owning 20% of VW’s voting rights.

Lower Saxony premier Christian Wuff is a supporter of the VW law, saying that it protects the firm's factories.

The European Court of Justice will decide whether to overturn the law next month. This will leave Porsche free to exert greater influence on VW’s business decisions.