KAI FU LEE, the former Microsoft executive being sued by the software giant because he tried to jump ship to Google, stands to lose a $10 million (£5.4 million) pay deal if he is prevented from working for the internet search engine.

Mr Lee was set to take the witness stand in a pre-trial hearing in Seattle last night as Microsoft continued its bitter battle to stop him working for the world’s most successful internet company. It was expected that Mr Lee would be asked to give details of his pay and bonus deals while a senior vice-president at Microsoft, as well as what he expected to earn at Google.

Microsoft says that Mr Lee is in breach of his employment agreement by leaving to work for a rival. A trial is set for January but both sides are going through extensive pretrial hearings in Seattle, down the road from Microsoft’s Redmond headquarters.

In court on Tuesday afternoon it was claimed that Mr Lee had asked Google to pay him at least $10 million if he left the world’s biggest software company to help to establish Google in China. Jeffrey Johnson, a lawyer for Microsoft, showed the court an e-mail dated May 7 that Mr Lee sent to Sergey Brin and Larry Page, the billionaire founders of Google. “If Google has great ambitions for China, I would be interested in having a discussion with you,” the e-mail read.

Mr Johnson said Mr Lee told Google that the discussions would be a waste of time if the company was not prepared to offer him $10 million.

Mr Lee confirmed the figure but added that the $10 million sum was derived from his anticipated earnings at Microsoft between 2005 and 2009.

Microsoft is seeking to extend an injunction granted in July to prevent Mr Lee from joining Google until the case comes to trial. What started out as a seemingly simple contract dispute between two of the world’s most powerful companies and a high ranking employee, has turned into a bitter battle that has revealed more about Bill Gates and his company than was imagined.

In his testimony and in documents filed at the court, Mr Lee has revealed that Microsoft made countless errors as it tried to establish in China. Mr Lee repeatedly warned Mr Gates and Steve Ballmer, Microsoft chief executive, that their failures in the country were making them a laughing stock among Chinese officials. An e-mail sent by Mr Lee to Mr Gates and Mr Ballmer in 2003 said that he was “deeply disappointed at our incompetence in China”. Mr Lee told the court that Mr Gates shouted at him in response to the e-mail and used “the f-word” to describe how Microsoft had been abused by the Chinese people and its Government.

Microsoft denied that Mr Gates made such a statement. In documents seen by The Times Mr Lee says that Mr Gates told him on July 15 that Mr Ballmer was going to file a lawsuit against him to stop staff leaving to work for Google.

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