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European Parliament set to hold inquiry into VW emissions scandal

A VW sign is seen outside a Volkswagen dealership in London, Britain November 5, 2015. REUTERS/Suzanne Plunkett

By Alissa de Carbonnel and Barbara Lewis

BRUSSELS (Reuters) - The European Parliament plans to set up a committee to investigate Volkswagen's (VOWG_p.DE) emissions scandal and whether regulatory oversight of the car industry was too lax.

Members of the European Parliament will vote on the issue around midday on Thursday, but lawmakers said that was a formality after leaders of the various political groups decided on Wednesday to establish the committee.

The inquiry could last for up to a year and will investigate alleged contraventions of European Union law and alleged "maladministration" in the application of the law, according to the proposal approved by the group leaders.

Some 45 members of the European Parliament will sit on the committee.

"For me, the diesel issue mainly has two dimensions. Firstly, it's about private companies organizing the largest industrial fraud ever," Claude Turmes, Green Member of the European Parliament, said.

"And secondly, it's about public authorities in member states and on the EU level not intervening despite having relevant information."

EU regulation of the car industry has been under scrutiny since Volkswagen admitted in September it had rigged U.S. tests for nitrogen oxide emissions in diesel vehicles and that up to 11 million vehicles worldwide - most of them in Europe - were fitted with software capable of cheating tests.

Liberal politicians also strongly backed the inquiry.

"We need to find out what has gone so badly wrong and why EU law has not been upheld," Guy Verhofstadt, leader of the European Parliament's liberals, said.

The main centre-right European People's Party was less enthusiastic, but parliamentary sources said Thursday's vote was still expected to back the plan.

"The creation of an inquiry committee is not our priority because it is not by creating new committees that we will solve the problems," Francoise Grossetete, EPP vice chairwoman, said.

Nitrogen oxides reduce air quality and member states have been flouting EU limits on a range of pollutants associated with more than 400,000 premature deaths per year, according to European Commission data.

The Commission has begun 21 infringement proceedings against nations in breach of existing rules and has proposed more stringent legislation in the face of resistance from some governments.

At a meeting of environment ministers in Brussels on Wednesday, four nations - Austria, Denmark, Germany and Poland - objected to a compromise put forward by Luxembourg, holder of the EU presidency.

Following Wednesday's uneasy compromise, pushed through by a qualified majority, the new Dutch presidency, which takes over from Luxembourg in January, together with the Commission and the European Parliament will try to get agreement on a legal text.

"This has been blocked for more than two years. If we lose time, we lose people," Carole Dieschbourg, Luxembourg environment minister, said.

(Editing by Mark Potter)