Vw passat alarm does not sound but lights still flash! Also a clicking sound can be heard when car locked,is this related to the same problem?

Sounds as if it is trying to go into closed loop and fails. Check EGR related parts and valve itself.

This could be your micro switch in the door lock itself , by a vw golf type four and other modelss you have an automatic locking function if you unlock your door but don't open it and most of the time it's the passengers door as it is used the least.firstly check the wiring to the lock and between the door and the body then checck the micro switch on the lock if its correctly seated and if its make a click when you press on the metal arm .

have you disabled the interior alarm from the general alarm...?see handbook...

sounds like the rear door sensor is kaput.all doors need to be shut before alarm will stabilise/you can leave the car open as if you dont have the key(with the correct code)the car is dead/immobilised.not even hot wiring will start car....

If I stand correct the security system when functioning when remote locking is executed the horn and parking lights should sound and flash once unless there is an open door, hood, trunk lid and the lights would flash but no horn confirmation (beep) Does this happen when manual locking the car with the door lock mechanism?

What panic alarm? A red flashing light in the middle of the instrument panel? Why, that's the antilock brake system. type in vw instrument warning lights in the search bar and read on it.

sounds like a faulty wire,possible on the ignition circuit or faulty battery leads.

insid ehe engine is another box where your relay switches are, also, behind the glove box you may have heard a clicking sound when your signals did work. check back there too

Usually on the passat, if the immobiliser is on, there is a yellow key symbol flashing on the clocks as you try and start it. Do the doors unlock with the remote key? If no flashing light and the key fob working, i would be looking at possibly starter relay. This is either located under the fuse box or under a plastic cover near the windscreen under the bonnet. (hood)

Do you have the remote programmed for the auto up and auto down on the windows if you hold the remote button?

I don't have that...but have heard that feature tends to cause problems like that.

Is the alarm sound muffled?