In a surprise move, the head of the general works council at German car giant Volkswagen, Klaus Volkert, announced Thursday he is stepping down.

Volkert, head of one of Germany's most powerful works councils, told the assembled workers he was resigning due to reasons of age and that he would be succeeded by his deputy, Bernd Osterloh as early as Friday, the employees said.

Nevertheless, industry sources said that Volkert, 62, was leaving his post in connection with a brivery scandal at VW's Skoda unit.

Volkert was sent packing due to "irregularities" in connection with an alleged bribery scandal surrounding Skoda's former head of personnel, Helmut Schuster, the sources said, confirming a corresponding report in the online version of the weekly magazine Der Spiegel.

Volkert has been head of VW's general works council since 1990 and also sits on the car maker's supervisory board. In the 1990s, he was involved in the introduction of the four-day week in VW and the "5000 x 5000" model. Rumors of his close ties with the management made him unpopular among some of the employees.

Resignation under pressure?

The VW general works council announced Thursday night that Volkert was "aware of the expected public discussions about the apparent irregularities that were connected to him."

Volkert himself denied being involved in criminal activities.

But the head of the powerful IG Metall labor union, Jürgen Peters, said that Volkert had been thinking of stepping down early for some time.

Der Spiegel reported that internal auditors at VW were looking into allegations that Volkert and Schuster were involved in a company that had been bidding to win a contract from Skoda. Schuster, who quit earlier this month, is already being investigated by prosecutors on allegations he received bribes from potential suppliers.

VW CEO Bernd Pischetsrieder promised a close investigation of the allegations against other VW employees and full cooperation with the judiciary.

Tip of the iceberg

The German economic magazine Wirtschaftwoche, citing well-informed circles, claims that the Skoda bribery scandal has much wider implications and that Volkert's resignation is by no means the end of the affair.

The magazine claims that certain politicians, including former minister president of Lower Saxony, Sigmar Gabriel, and German Chancellor Gerhard Schröder, were aware of the wrongdoings in VW's Skoda unit.

Both politicians rejected the claims as unfounded.

"This is a wrong, defamatory allegation," said Bela Anda, a government spokesperson. "The chancellor will take legal actions against its propagation."