The US has slapped beleaguered Japanese auto giant Toyota with a lawsuit, alleging it covered up safety problems with its Prius model.
Toyota is set to recall several hundred thousand Prius hybrids in the US, and the company was also investigating whether its Lexus luxury hybrids have the same problem, given that they share the brake system.
The Japanese giant, which dethroned General Motors in 2008 as the world's biggest automaker, is reeling from a litany of complaints about problems ranging from unintended acceleration to brake failure.
With Toyota already pulling millions of vehicles worldwide because of sticking accelerators, the flagship Prius became the latest model to be targeted in US investigations.
The Nikkei business daily said that Toyota had decided to recall an estimated 270,000 Prius cars in Japan and the United States to fix a brake problem affecting the newest version of the hybrid.
US authorities Thursday ordered a probe into the problems with the Prius, which is pivotal to Toyota's efforts to recover from a massive loss last year. The group is already facing a two-billion-dollar bill from the huge recalls.
President Barack Obama has been briefed on Toyota's safety problems, the White House said, after Transportation Secretary Ray LaHood said Toyota owners should "stop driving" problematic cars them and take them to a dealer.
He later retracted the remark, which caused a brief furore.
And lawyers filed a class-action lawsuit in Colorado alleging Toyota had known about the unexpected acceleration issue "for several years".
Toyota said Friday that it was still considering whether to recall the Prius, a day after confirming there was a design flaw with the fuel-sipping car.
The company said it had redesigned the anti-lock braking system (ABS) -- designed to prevent skidding -- for the latest version of its Prius produced since last month and would soon announce steps for those already on the road.
"There is a question about whether this will develop into a massive recall," Daiwa Securities Capital Markets analyst Kazuhiro Takahashi said.
But if owners only have to take their Prius car to dealers for a software update, "it's not so bad", he added.
The Japanese maker is not the only major carmaker with problems: Ford said there was a glitch affecting braking in some of its hybrid vehicles.
The Prius -- which combines a petrol combustion engine with a battery-powered electric motor -- is Toyota's best-selling hybrid car and vital to its efforts to stay in pole position in fuel-efficient vehicles.
In Washington, the National Highway Traffic Safety Administration announced a formal probe into the Prius after 124 complaints from consumers on the 2010 model of the world's most popular hybrid.
The investigation would examine "allegations of momentary loss of braking capability while traveling over an uneven road surface, pothole or bump", the government agency said.
Toyota has come under heavy fire in the United States for its handling of recalls affecting about eight million vehicles worldwide -- more than its entire 2009 global sales of 7.8 million vehicles.
Apart from a brief interview with Japanese broadcaster NHK over the weekend in Switzerland, Toyota's president Akio Toyoda has not appeared in public to comment on the recalls since they went global last week.
The gas pedal problems have been blamed for several accidents, including an August crash in California in which four family members were killed when their Lexus sedan sped up on a highway and crashed in a ball of flames.
Despite the troubles, the Japanese giant said Thursday it was on course to earn 80 billion yen (880 million dollars) this fiscal year to March.
Toyota shares rose 1.06 percent to end at 3,315 yen, bucking a weaker overall market, after plunging more than a fifth over the previous two weeks.
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