A female executive at Microsoft was paid "more than £1 million" after being overlooked for a managing director role it has been claimed.

Natalie Ayres worked for the tech giant for 15 years and eventually became general manager of Microsoft's Small-Medium Enterprises and Partners Group. She was even expected to take on the managing director role following on from Alistair Baker. However, it is alleged it was given to Gordon Frazer in 2006, a general manager at Microsoft South Africa, before Ayres had even finished her interview process.

Ayers subsequently left the company at the end of the year under a "compromise agreement", which was thought to include a pay-off of more than £1m. A number of colleague believed she had been treated unfairly and the incident raised questions over gender equality in the company.

A source told The Telegraph: "They [management] do not follow procedure enough and if your face doesn't fit, you suffer. It's a boys' club. The only way to progress beyond a certain point is to become a male in female clothing.

However Microsoft declined to comment on the issue.

"As is standard practise for any responsible company, Microsoft does not comment about individual employees, current or former. However, Microsoft places great importance on the core values of diversity and inclusiveness, which is just one of many reasons why it is consistently ranked as one of the top 50 work places in the UK.," a spokesman said.