Failure of NTLM logon on machines running Windows 7 or Internet Explorer 8.
This problem is most likely caused by enhanced security in Windows 7, Vista and Windows 2008. Previous versions of Windows (XP) would fall back to NTLM v1, if NTLM v2 failed.
- On Windows 7 clients, navigate to Control Panel > Administrative Tools > Local Security Policy.
- In the left pane, navigate to Security Settings > Local Policies > Security Options.
In the right pane, find Network Security: LAN Manager authentication
By default, the value of Network Security: LAN Manager authentication level is set to Send NTLMv2 response only. Refuse LM & NTLM.
- Set the value of Network Security: LAN Manager authentication level to Send LM and NTLM - use NTLMv2 session security if negotiated.