The leak, related to Microsoft Windows 2000 and Windows NT 4.0 code, could create an opportunity for hackers to find vulnerabilities in current versions of Microsoft software.
Until now, Microsoft has attempted to keep the code secret from the public domain, but the leak could give competing firms an advantage over Microsoft. The amount of leaked code is estimated to be around 2 per cent of the total.
In a press statement, Microsoft implied it is unhappy about the situation, but does not believe the leak is due to an internal security breach.
"On Thursday, Microsoft became aware that portions of the Microsoft Windows 2000 and Windows NT 4.0 source code were illegally made available on the Internet. It's illegal for third parties to post Microsoft source code, and we take such activity very seriously. We are currently investigating these postings and are working with the appropriate law-enforcement authorities. At this point, it does not appear that this is the result of any breach of Microsoft's corporate network or internal security. At this time there is no known impact on customers. We will continue to monitor the situation."
This month Microsoft experienced other embarrassments; a MyDoom attack against its servers, and it was forced to announce a security flaw in Windows XP, for which it issued a patch.