European Union countries have been accused of a "shockingly cynical move" in agreeing to allow diesel cars to pollute more than double the current legal limit as part of a package to introduce real world emissions testing following the Volkswagen scandal.
The decision was made just hours after VW posted a third-quarter loss of 3.5 billion euros (£2.5 billion).
The German car maker's results show it would have made a profit of 3.2 billion euros (£2.3 billion) if the ''diesel issue'' had not emerged.
Experts from 28 EU nations gathered in Brussels at a meeting of the technical committee of motor vehicles to agree by a large majority that cars will undergo real driving emissions (RDE) tests as well as laboratory examinations from September 2017.
But environmental group Client Earth expressed its anger that cars will be allowed to emit up to 2.1 times more air pollution in RDE tests than the legal limit.
The European Commission released a statement which said the difference between test results would be allowed because of the "technical limits" in the short-term improvement of diesel cars.
But Client Earth's clean air lawyer, Alan Andrews, said: "This is a shockingly cynical move. Car manufacturers have failed to hit air pollution limits on diesel cars and instead of trying to sort the problem, they have been told 'that's alright, we'll just lower the bar'."
The draft regulation will now be sent to the European Parliament for scrutiny.
Mr Andrews continued: "The European Parliament must veto this or it will make a mockery out of the whole EU law-making process, which is already under the spotlight following the VW scandal.
"If allowed to stand, there is no doubt this decision will cost lives. It is appalling that the interests of car companies are being put above people's health."
The committee also agreed that the accepted discrepancy between test results will be brought down to a factor of 1.5 by January 2020 for new models and January 2021 for all new vehicles.
VW admitted installing sophisticated software designed to cheat emissions tests in 11 million vehicles worldwide, including almost 1.2 million in the UK.
The Environmental Protection Agency in the US found that VW cars with defeat devices produced nitrogen oxide pollutants at up to 40 times the legal standard.
VW announced in its financial results that it has set aside 6.7 billion euros (£4.8 billion) to deal with the diesel scandal.
This is 200 million euros (£144 million) more than the figure given by the Wolfsburg-based firm when the news broke last month.
Chief executive Matthias Muller said: ''The figures show the core strength of the Volkswagen Group on the one hand, while on the other the initial impact of the current situation is becoming clear.
''We will do everything in our power to win back the trust we have lost.''
In the UK, VW is preparing to repair almost 1.2 million vehicles. These consist of around 508,000 Volkswagen cars, 390,000 Audis, 132,000 Skodas, 80,000 VW commercial vehicles and 77,000 Seats.
Volkswagen UK managing director Paul Willis said the firm has started writing to those customers.
Motorists have not been told when their vehicles will be recalled, although VW bosses said the process is expected to begin in the new year.
It emerged on Tuesday that the Serious Fraud Office (SFO) is assessing whether to launch an investigation against VW.
When Michael Hurwitz, a senior official at the Department for Transport, was asked by Labour MP Mary Creagh at a meeting of the Commons Environmental Audit Committee whether an SFO inquiry was under way, he replied: "They have not shared with us the details. We understand they are looking at it."
The SFO later issued a statement which read: "We are neither confirming nor denying our interest in this matter."