BERLIN (Reuters) - German efforts to overcome a diesel scandal were dealt a blow on Tuesday after prosecutors widened a Volkswagen <VOWG_p.DE> probe and a key environmental group said steps proposed by automakers to cut pollution remained inadequate.
Germany's car industry, which employs some 800,000 people and is the country's biggest exporter, is under intense pressure to cut diesel fumes almost two years after Volkswagen admitted to deliberately cheating U.S. pollution tests.
The Deutsche Umwelthilfe (DUH), a lobby group which has advocated banning polluting cars from roads, said proposals to cut diesel fumes, which were agreed at a high-profile summit this month, remain inadequate.
There is no alternative to pursuing court enforced diesel bans in 16 cities, DUH chief Juergen Resch said.
Chancellor Angela Merkel, running for a fourth term in an election on Sept. 24, said for the first time this week that Germany will eventually have to ban new diesel cars, following the lead of other European countries.
German prosecutors in Volkswagen's home state of Lower Saxony confirmed on Tuesday that 38 people were now included in an investigation into fraud and misleading advertising, almost two years after the scandal broke in September 2015.
Prosecutors in Braunschweig want to know what role employees played at Volkswagen, which used illegal engine management software to help a car detect when it was being subjected to a series of pollution tests.
VW increased pollution filtering during the test, but throttled back the system in real-world driving conditions, as a way to improve vehicle performance.
Earlier this month, prosecutors in Munich said the Audi [NSUG.DE] luxury division of VW was also part of their investigations into diesel emissions manipulation.
(Reporting by Markus Wacket and Jan Schwartz in Hamburg, editing by David Evans)