The German car-maker has said 11 million vehicles worldwide were fitted with defeat device software which conned testers in the US into believing their vehicles met environmental standards.
Transport Secretary Patrick McLoughlin said the Government was taking the “unacceptable actions of VW extremely seriously”.
He went on: “We have called on the EU to conduct a Europe-wide investigation into whether there is evidence that cars here have been fitted with defeat devices.
“In the meantime we are taking robust action. The Vehicle Certification Agency, the UK regulator, is working with vehicle manufacturers to ensure that this issue is not industry wide.
“As part of this work they will re-run laboratory tests where necessary and compare them against real world driving emissions.”
Alexander Dobrindt, Germany’s transport minister, said VW had confirmed the affected vehicles include cars with 1.6-litre and 2-litre diesel engines in Europe.
“We don’t yet have figures for how many of these 11 million cars that are apparently affected are in Europe,” Mr Dobrindt said. “That will be cleared up in the next few days.”
Volkswagen chief executive Martin Winterkorn resigned over the scandal but insisted he was not aware of “any wrongdoing on my part”.
According to reports the 68-year-old could receive a severance package of up to two years of his annual salary, which would be worth over £22 million.
The Environmental Protection Agency (EPA) in the US said 482,000 of VW’s 2009-15 cars were fitted with sophisticated software to switch engines to a cleaner mode when they are undergoing official emissions testing.
Once on the road, the cars produced nitrogen oxide pollutants at up to 40 times the legal standard.