If websites that use Java are causing NTLM authentication prompts due to a known fault in Java 7, check the version of Java you have installed on your client machines as there is a bug in the Java 7 software with handling NTLM v2.
This is not a Smoothwall issue. This is a bug in the Java 7 software that causes the NTLM prompts per the following help threads:
https://forums.oracle.com/thread/2402469?start=15&tstart=0
http://bugs.sun.com/view_bug.do?bug_id=7184444
This issue is resolved in Java 8.