Take it back
I still think that anybody affected by this should just return the vehicle to the dealer and ask for a full refund under section 260 of schedule 2 of the Competition and Consumer act 2010. This specifically states that a major failure has occurred if a reasonable consumer would not have bought the goods if they had known about the issue beforehand. The exact quote from the law is below as well as a link to the schedule.
When a major failure occurs, the consumer is entitled to a repair, refund or replacement. Crucially this is the consumers choice. If VW started getting thousands of vehicles returned for a full refund they might think twice before indulging in such dodgy practices again. Too many retailers & manufacturers rely on consumers not knowing and exercising their statutory rights.
260 When a failure to comply with a guarantee is a major failure
A failure to comply with a guarantee referred to in section 259(1)(b) that applies to a supply of goods is a major failure if:
(a) the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure
ACCC guide to motor dealers also makes for interesting reading: