Car firm Volkswagen (VW) has said it will not pay the £2.5m the mayor of London claims it owes in missed congestion charge payments, following the 2015 emissions-rigging scandal.
Sadiq Khan said 80,000 VW engines fitted with “defeat devices” were registered in London.
The devices, which detected when an engine was being tested, changed performance to improve results.
VW said the cars had “validly” qualified for a low emissions discount.
The world’s largest car manufacturer admitted about 11 million cars worldwide were fitted with the device.
However, a spokesperson for VW said all of its vehicles which benefitted from the Congestion Charge Greener Vehicle Discount “did so validly throughout the relevant period”.
There is “no basis on which it can be said that Transport for London has lost any sums as a result of the NOx issue.”
“No sums are therefore due in compensation,” the spokesperson added.
Mr Khan said the actions of VW were “nothing short of a disgrace”.
Last year a US court ordered VW pay a $14.7bn (£12bn) settlement over the scandal.