A US federal judge has approved a 15 billion dollar (€13.4bn) court settlement of most claims against Volkswagen over its emissions-cheating scandal.

A $15bn (€13.6bn) settlement over carmaker Volkswagen’s emissions cheating scandal has cleared a key hurdle, with a federal judge giving preliminary approval to a deal that includes an option for owners to have the firm buy back their vehicles.

Volkswagen will pay owners of its polluting diesel cars up to $7,000 (€6,160) and agree to fund a grant program to offset air pollution, under a $10bn settlement being negotiated for submission to a federal judge next week, people familiar with the talks said.

Volkswagen agreed to fix or buy back about 500,000 tainted cars in the US, taking a significant step forward in its effort to emerge from the emissions-cheating scandal.