The German government has promised the country's municipalities and cities one billion euros (1.18 billion U.S. dollars) in additional funds to combat nitrogen oxide pollution caused by diesel vehicles, ChancellorAngela Merkel(CDU) told reporters on Monday.

The decision was made at the second "diesel summit" held between representatives of the German automotive industry and federal- and communal levels of government.

The funds are intended to help localities which are particularly affected by urban air pollution to improve their e-mobility infrastructure and enhance the provision of public transportation.

Merkel said that all of those who participated in the second "diesel summit" shared the opinion that blanket banks on diesel vehicles must be avoided.

"The time is short," she warned, urging rapid action on all possible fronts to eliminate the problem of excessive nitrogen oxide emissions.

The new offer of public funds amounts to a doubling of financial assistance first agreed at during the first "diesel summit" in August.

A "Mobility Fund" was created at that earlier meeting which the Federal Government and automotive industry will pay into in equal parts.