German motor vehicle authority KBA had discovered cheating software fitted to Mercedes-Benz C-Class and E-Class vehicles and ordered the carmaker to recall 280,000 vehicles, Spiegel said.

A fine of up to 5,000 euros per vehicle is being considered by the Stuttgart prosecutor, the magazine said.

A spokesman for the prosecutor's office said the investigation was ongoing and would not be concluded before year-end.

Daimler declined to comment while the investigation was under way.

In May 2017, German prosecutors searched Daimler offices as part of a fraud inquiry related to possible manipulation of exhaust gas after-treatment in diesel cars.

Daimler also faces regulatory scrutiny by United States authorities. In February 2016 the US Environmental Protection Agency asked Mercedes-Benz to explain emissions levels in some of its diesel cars.

Prosecutors in Germany have used administrative orders to impose fines on Volkswagen, Audi and Porsche, blaming senior management for oversight lapses which allowed emissions cheating to take place.

In May, Stuttgart prosecutors fined Porsche 535 million euros and supplier Bosch 90 million euros, while prosecutors in Braunschweig fined VW 1 billion euros and Munich prosecutors imposed an 800 million euros fine against Audi.