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Photograph: Photo by Bruno Kussler Marques, used under CC BY

Volkswagen will have to pay as much as 14.7 billion dollars for buybacks, damages and penalties in the US resulting from the carmaker's emissions scandal, a document filed at a San Francisco court by prosecutors showed Tuesday.

The German carmaker is responsible for buying back or retrofitting about 480,000 diesel vehicles in the US affected by the scandal.

The payments to be made by Volkswagen include 2.7 billion dollars to support environmental projects, while the carmaker is to spend an additional 2 billion dollars on research towards reducing emissions.

"By duping the regulators, Volkswagen turned nearly half a million American drivers into unwitting accomplices in an unprecedented assault on our environment," Deputy Attorney General Sally Yates said at a press conference in Washington.

The settlement "restores clean air protections that Volkswagen so blatantly violated," Gina McCarthy, the head of the US Environmental Protection Agency, said.

Under the settlement, VW will offer to buy back 2009-2015 diesel models of Jettas, Passats, Golfs and Beetles and the Audi A3 at their value in September 2015, before the emissions problems became known. The carmaker will also offer loan forgiveness for consumers who now owe more than their car is worth.

Drivers who leased their cars would be able to terminate their leases.

Consumers would also have the option to keep their cars and have them retrofitted to meet emissions standards along with cash payments to redress the harm caused by the company's deceptive advertising.

The arrangement must be approved by Judge Charles Breyer before it can come into force. His decision is expected in late July.

Following Breyer's approval the complainants can decide whether or not to accept the offer.

Last September, Europe's largest carmaker admitted to installing software in around 11 million of its cars that understated vehicle emissions during official tests.

Volkswagen later said the company had set aside about 18 billion dollars to cover the cost of the scandal, including lawsuits in the US and elsewhere.

Consumer protection officials in Europe have called for an agreement similar to that reached in the US. However, Volkswagen said last week, any agreement reached in the US would not affect customers in Germany or Europe.

The settlement does not resolve all of the US concerns about VW's actions and does not resolve potential civil penalties under the US Clean Air Act or pending claims on 3-litre diesel vehicles, Yates said.

"It marks a significant first step towards holding Volkswagen accountable for what was a breach of its legal duties and a breach of the public's trust," she said.

"While this announcement is an important step forward in achieving justice for the American people, let me be clear, it is by no means the last.

Potential criminal charges are also possible, she said.

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