A VW lawyer, in a court hearing, has said the company believed it could fix 85,000 three-litre VW, Audi and Porsche diesel vehicles in the US, instead of opting for costly buybacks.

According to Reuters, Joshua Van Eaton, a justice department lawyer, said work was in progress to come up with a strategy to rectify the affected vehicles and that it could go on for months.

US district judge Charles Breyer set a 25 August hearing date for updating the status.

This week, VW reached settlement agreements with US regulators to buy back 475,000 affected two-litre diesel cars and rectify them on regulators' approval. It also agreed to fund zero-emissions vehicle efforts, emissions offset programmes and to settle the US state lawsuits.

VW would incur huge costs to buy back the three-litre vehicles. However, the company's lawyer, Robert Giuffra, said "the company believes that we can fix the three-litre to the standards to which those cars were originally certified". He added that testing was to ensure the durability of the proposed fix.

Van Eaton said the discussion was highly technical and it "takes time to be fully confident whatever is being proposed is a technically sound solution."

US EPA spokesman, Nick Conger, said the agency continues "to investigate the problems with the three-litre diesel vehicles. We want to get it right, so we will explore solutions that are technically sound and a fair deal for consumers." He did not, however, say if EPA was pursuing a buyback offer for owners.

Breyer has ordered a hearing on 26 July over two-litre agreements and is likely to approve buy backs by October.

The three-litre vehicles were not fitted with the so-called defeat device but used an auxiliary emissions-control device that allowed them to emit up to nine times over the legal pollution limits, which is much less than the two-litre vehicles.

VW has been prohibited from selling its three-litre vehicles in the US. These include 2009-2016 model year VW Touareg, Porsche Cayenne, Audi A6 and A7 Quattro, A8 plus Q5 and Q7.