Frankfurt - Luxury carmaker Porsche released some of the price pressure on Volkswagen stock Wednesday, announcing in Stuttgart it would unwind futures contracts on up to 5 per cent of Volkswagen AG voting stock.

At the same time it affirmed its ultimate intention to buy "up to 75 per cent" of Volkswagen, Europe's biggest carmaker.

The extraordinary tripling in the Volkswagen price in the space of Monday and Tuesday caught out many hedge funds who were forced to pay vast amounts for the scarce stock to settle short-selling deals.

It has also led to criticism of the entire stock-exchange system.

The announcement on the Porsche website sent the Volkswagen price 40 per cent lower to 565 euros as of late afternoon, still far higher than the level of 200 euros that prevailed in August.

A spokesman said the scale of Porsche's release of options on Volkswagen stock had been "tiny," but gave no figures. He stressed that Porsche was only selling options to stock it did not own, not the stock itself.

Observers assumed Porsche's profit would have been huge, but the spokesman did not reveal the margin.

In a statement, Porsche Automobil Holding SE said that, depending on the state of the market, it planned "to settle hedging transactions in the amount of up to 5 per cent of ordinary Volkswagen shares."

The purpose of unwinding the contracts was not to profit by it, but "of course" Porsche did earn a better price, the spokesman said.

By mid-afternoon, Porsche's own stock was trading 10 per cent higher at 55.90 euros on the Frankfurt Stock Exchange.

"We want to ensure the Volkswagen price returns to a normal level," the Porsche spokesman said.

The German state of Lower Saxony, which owns 20.1 per cent of Volkswagen, affirmed it would not sell any. State premier Christian Wulff said the state did not own the stock to make a profit but for strategic reasons.

Porsche rejected any responsibility for the sharp fluctuations in the Volkswagen price, saying it had not been buying or selling this week. It insisted it had obeyed German stock exchange laws.

Porsche said Sunday it has bought 42.6 per cent of VW voting stock and had options to obtain a further 31.5 per cent by next year.

The Frankfurt Stock Exchange reduced the weight of Volkswagen stock in its DAX index of 30 top shares to a maximum of 10 per cent. On Tuesday Volkswagen had made up 26 per cent of the basket. (dpa)