The German carmaker admitted it had removed the royal warrant from official communications after being criticised over software designed to cheat pollution tests.
The Times has also learnt that the royal household has about 12 cars affected by the VW crisis that may have to be returned to garages early next year.
The disclosure marks the latest embarrassment for the company, which is embroiled in the deepest crisis in its 78-year history after revealing that it equipped 11 million diesel vehicles worldwide with software that switches the engine to a low-emissions mode during tests.
VW has already been forced to recall almost 1.2 million cars and vans in the UK to have the software stripped out.
The royal warrant is a mark of recognition to companies that supply goods or services to the households of Her Majesty. It enables companies to use the Queen’s coat of arms on official letterheads. Volkswagen was among dozens of companies to use it.
However, in a statement last night, it said: “In light of the current situation, Volkswagen Group UK has decided to remove the royal warrant logo from communications where it would previously have featured. We have informed Buckingham Palace of our decision. The royal warrant remains extant.”
A spokesman for Buckingham Palace said: “We do not comment on individual warrant holders as these are commercially confidential matters. However, all royal warrants are kept under review and must be renewed periodically.”
Almost 1.2 million cars in the UK are affected by the scandal, including VW passenger cars and vans alongside those manufactured by other VW-owned brands: Audi, Seat and Skoda.
The company has already pledged to fix vehicles in the UK from January next year.
The latest disclosure was made at the end of another difficult week for VW.
The company has faced mounting threats of legal action in the UK. One law firm, Leigh Day, said that it was handling 4,000 customer complaints.
