The user xxx\xxx failed an authentication attempt due to the following reason: The user could not be authenticated using Challenge Handshake Authentication Protocol (CHAP). A reversibly encrypted password does not exist for this user account. To ensure that reversibly encrypted passwords are enabled, check either the domain password policy or the password settings on the user account.
For more information, see Help and Support Center at http://go.microsoft.com/fwlink/events.asp.
Local Security Settings / Security Settings / Account Policies / Password Policy: Store passwords using reversible encryption. After setting this policy you must reset one time the password.