(BRUSSELS) - The European Commission on Thursday ratcheted up pressure on Germany by taking fresh legal action over a disputed law shielding national car maker Volkswagen from takeovers.

The commission gave Berlin a two-week deadline to respond to concerns about the law and said failure to provide answers would result in the case being transferred back to the European Court of Justice, a spokesman said.

Last year the European Union's top court ruled against a law giving the German state of Lower Saxony, which owns 20 percent of the company's shares, the ability to block company decisions.

Normally a blocking minority is only accorded to those owning more than 25 percent.

Last week, the German government approved a new draft law that would preserve Lower Saxony's minority blocking position.

"Failure by the German authorities to comply with the 2007 judgement could result in fines being applied by the Court of Justice," the commission said in a statement.

The commission said last week when the German government approved a new draft law that it considered that the move did not amount to compliance with the court's ruling and warned that new legal action against Berlin could follow.

VW is an iconic German industrial group and has been protected from takeovers by the inital VW law since it was privatised in 1960.

German luxury sportscar maker Porsche, which wants to increase its 31 percent interest in VW to a majority stake, has also been leading a legal campaign of its own against the law.

Porsche, which was unable to reach an accord with Lower Saxony at a VW general assembly in April, has asked a northern German court to reject the state's blocking minority power.

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