Nissan said Thursday it was suspending all production destined for the local market, as Japan's number-two automaker grapples with a mounting inspection scandal that has already seen it recall some 1.2 million vehicles.

"Nissan decided today to suspend vehicle production for the Japan market at all Nissan and Nissan Shatai plants in Japan," it said in a statement, referring to an affiliate.

The announcement comes weeks after the company announced the major recall as it admitted that staff without proper authorisation had conducted final inspections on some vehicles intended for the domestic market before they were shipped to dealers.

On Thursday, it said a third-party investigator found the misconduct had continued at three of its six Japanese plants even after it took steps to end the crisis.

"Nissan regards the recurrence of this issue at domestic plants -- despite the corrective measures taken -- as critical," it said.

"The investigation team will continue to thoroughly investigate the issue and determine measures to prevent a recurrence."

Nissan president Hiroto Saikawa offered a blunt assessment, saying that "old habits" were to blame.

"You might say it would be easy to stop people who are not supposed to inspect from inspecting," he told reporters Thursday.

"But we are having to take (new measures) in order to stop old habits that had been part of our routine operations at the factories."