The German government is expected to pass legislation amending the Volkswagen Law before the summer. 

According to German magazine Focus, the coalition government has agreed to back proposed changes that will be presented to the cabinet by the justice ministry in the next few weeks, and win the cabinet's approval.

The changes would still allow Volkswagen's workforce to veto any management decision to close a plant. The law would allow the state of Lower Saxony to retain its blocking minority, with a stake of just 20%.

The proposed amendment is a response to the fact that the existing Volkswagen Law was ruled as illegal by the European Court of Justice in October 2007. That law limits voting rights to a maximum of 20%, regardless of the number of shares held. Porsche currently owns over 30% shares and is expected to increase its shareholding to over 50% during 2008.

Porsche chief executive Wendelin Wiedeking and his deputy Holger Haerter have written to Germany's justice minister Brigitte Zypries objecting to proposals.

Wiedeking wants to have full control over the company and any decisions about the location of future production.

"A new VW Law would hurt business conditions in Germany and massively damage our image in Europe and the world," Porsche said in a statement.

According to AFP Wiedeking has said that there should be "no exceptional rules for VW" and that "Porsche deplores discrimination". He has asked for common rules to apply to VW as they do to all other companies.