Volkswagen is expected to announce its WRC programme at this month's Rally Portugal, according to Autosport magazine.

There have been reports that the German manufacturer will have a budget of 100 million-euro set aside for its WRC assault, which will commence in 2012.

Autosport also reveals that VW tried - and failed - to sign Sebastien Loeb, and that Petter Solberg is a strong possibility for a seat.

Carlos Sainz is tipped to be heavily involved in the project, while Francois-Xavier Demaison has been hired as the team’s chief engineer.

Meanwhile, Citroen Total World Rally Team boss Olivier Quesnel has stated that he is not concernered by the threat posed by Volkswagen entering the WRC with a mega-budget.

"They did the same [big budget] in Dakar," said Quesnel, "and Mitsubishi won with no money. And, don't forget, Mitsubishi was red too!

"No, I don't worry about this, this is the way the German guys can work. For me, it's good for the sport and for the championship that they are coming and that we have Mini as well."

VW is believed to be readying a Polo with a direct injection 1.6-litre turbocharged engine, based on the unit that will power the new Polo R. They had intended to use a car based on the Scirocco, but it is too wide for the  WRC’s current regulations.

The team has yet to confirm if  they will run their Dakar programme alongside the WRC entry.

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