Last week the painful chapter of Damilola Taylor’s death seemed to have closed. The boy’s teenage killers were jailed, his Nigerian father denounced the “catalogue of failures” in the six-year saga and the senior investigating policeman said the spectre that had hung over Peckham was finally “at an end”.

In the south London community of Peckham, however, the sense of dread remains palpable. The lawless gang of which Danny and Ricky Preddie were members when they stabbed 10-year-old Damilola in November 2000 continues to wreak mayhem.

“The authorities have bulldozed the flats where Damilola died, but the problems haven’t gone away,” says a local journalist. “There are similar stories in the paper every week.”

Two horrific incidents stand out. In June masked intruders in hooded tops burst into a christening celebration in Peckham. One of the guests, Zainab Kalokoh, died from a single shot to the head as she cradled a baby. The gang stole handbags, mobile phones and wine before fleeing. So there will be another trial of teenage defendants, this time aged 14, 16 and 18.

Then, last month, the Peckham Boys rampaged through the territory of another gang, the Ghetto Boys in New Cross, knifing to death an innocent bystander, Jason Gale-Bent, 29, and stabbing a second man. Fearing drive-by shootings, police evacuated two nearby schools.

The Preddie brothers were only 12 and 13 when they killed Damilola. The case highlighted a pitiless street culture in which feral children spread fear with virtual impunity as they bullied other youngsters and stole mobile phones and cash. Those who defied them were threatened with weapons and were punished by “jooking” — stabbing in the leg. The broken beer bottle that jabbed Damilola severed a main artery.

The Preddie brothers, already hardened criminals when they attacked Damilola, went on to acquire a string of convictions for crimes ranging from assault to burglary before incriminating forensic evidence came to light last year. At their retrial they were sentenced to eight years’ detention for manslaughter, and will be eligible for parole after serving half their sentence.

A police officer who knows the Preddies well described them as “the scum of the earth”. Yet it is becoming increasingly clear that they were not just rotten apples thrown up by the underclass, but are symptomatic of a phenomenon that is transforming the behaviour of even “respectable” youngsters in our inner cities.

Mike Presdee, head of criminology at Kent University, has studied the Peckham Boys and other teenage gangs over many years. He says they talk about their street confrontations in terms of unscripted drama performances which they improvise.

“They come home from school and put on the uniform of the street. Like actors, they come out dressed as something else. Then they gather and the night unfolds.”

Typically, street uniform comprises designer sports gear with hoods and basketball caps. The weapons of choice are baseball bats and CS gas, although many youngsters stash bricks and planks at certain places in case they are needed. “The government’s response of controlling knives and guns goes nowhere, because you can make a weapon out of anything,” Presdee says.

Such child thugs are formed at an early age, in his experience. “Most teachers can point out the child, even from the age of six, that will end up in jail. School holds nothing for them — they can’t understand it, they stop listening and they go through a process of being told off and ridiculed by their friends and teachers.”

The Preddies fitted this profile. Their father, Alfred, emigrated from Jamaica to Britain in 1966 to become a shopkeeper and married twice, siring many children before his death in 2004. Their mother, Marion, was described as a fiery woman of Jamaican origin. The boys dropped out of school and were effectively left to fend for themselves.

Like many of their peers, they choose the street as their alternative stage. “It’s where these kids make their lives and play out being somebody,” says Presdee. Ricky Preddie was only 12 when he was caught with a knife and was himself stabbed.

The cruelty such children inflict on vulnerable youngsters not only enlivens their dull lives, but reflects society’s increasing insensitivity to violence, Presdee believes. “Most of us have seen someone killed through the media. Vicarious experience is no longer enough.” The psychotherapist Camilla Batmanghelidjh has observed the metamorphosis of individuals and the escalating level of violence during the 11 years since she founded Kids Company, a charity in Peckham devoted to the most severely disturbed children. She knows the Peckham Boys well.

In her experience, the process begins in infancy with a disruption to the loving relationship with a maternal figure that develops those areas of the brain responsible for social behaviour. “It could be that the maternal carer is very stressed or drug-addicted, so she becomes desynchronised with the child.”

Add constant exposure to abusive situations and a state of terror sets in. “These kids will tell you that they can’t calm down. They can’t sit still or sleep, and need action. They find it very difficult to concentrate at school.”

The impoverishment of the social service agencies around them reinforces their impression that adults are unreliable and that they are lone soldiers at street level, responsible for their own survival, says Batmanghelidjh.

“The despair of these children escalates and their resilience wears off. As they disengage more and more from society, they are capable of more suicidally dangerous behaviour and get to the point where they chance with death. They don’t care any more what happens to them.”

The mutation has one final stage — it becomes infectious. “When you put that kind of kid near your child, who may be well cared for, your child is going to have to up the ante to survive in the school playground. These kids heighten the temperature of violence, so other kids have to become more violent. Violence then becomes the normal currency, and this culture spreads like a virus.”

Often it’s safer to be in a gang than not. The price is sometimes to become runners who carry drugs or guns for older gang members keen to indoctrinate the next generation. And so the cycle continues.