* Plan needs no money from taxpayers, car owners - minister
* Diesel fix up to carmakers - transport minister
* FinMin says diesel fix "not an issue for public money"
* Comments come ahead of diesel summit on Friday (Adds FinMin comments, further details)
BERLIN, Sept 26 (Reuters) - German Transport Minister Andreas Scheuer said on Wednesday that his plan to battle air pollution in cities by retrofitting older diesel vehicles would not require taxpayer funds or money from the car owners.
The government is due to hold another summit on Friday to try to agree a way to tackle pollution from diesel vehicles without resorting to bans. Scheuer has said his priority was ensuring owners can swap old cars for cleaner ones.
"My concept is currently based on needing no taxpayer money and that the car owners won't have to pay for it. That means that German car manufacturers would have to build a framework that helps to rebuild trust," Scheuer told broadcaster ZDF.
The subject has proven controversial as pollution levels have exceeded European Union limits in a number of German cities. But the government is worried about the cost of replacing or upgrading vehicles and the impact on the country's powerful car industry, its biggest source of export income.
Scheuer said the government plan would not extend to older diesel vehicles made by foreign manufacturers, which do not fall under German jurisdiction.
Carmakers and German government representatives failed to reach a compromise on Sunday over potential hardware retrofits for older diesel vehicles. Friday's meeting will take place ahead of a deadline at the end of September set by Chancellor Angela Merkel to stave off bans on older vehicle.
Two government sources said on Tuesday the high-level summit would be held in the German chancellery, and both Environment Minister Svenja Schulze and Economy Minister Peter Altmaier would take part.
The government currently envisages offering owners of affected diesels in 10 heavily polluted cities options including buy-backs, exchanges and hardware refits, according to a document seen by public broadcaster Bayerischer Rundfunk.
Finance Minister Olaf Scholz said he would not make taxpayers money available. "I do not think that's an issue for public money," Scholz, who is also vice-chancellor, told dpa news agency.
He also said incentives to buy a new diesel car would not be enough to tackle the problem.
"When it comes to driving bans in Germany, we talk about the life situation of millions of citizens... Most of us can't afford a new car, but buy a used vehicle," Scholz said.
"Therefore we want that there are possibilities of retrofitting," he added.
Reporting by Gernot Heller and Michael Nienaber Editing by Maria Sheahan