Open squid configuration fine c:/squid/etc/squid.conf and add/modify the following.
Uncomment the below line.
auth_param basic program c:/squid/libexec/ncsa_auth.exe c:/squid/etc/passwd
The following needs to be in that order and I placed it right after the line 'acl CONNECT method CONNECT'.
acl ncsa_users proxy_auth REQUIRED
http_access allow ncsa_users
http_access deny all
Then add the htaccess user details to the file c:/squid/etc/passwd
Finally restart the squid service.