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Percy has become hot political property. At his incarceration, Yvonne Tuohy's parents were assured he would never be released and any wrong move, the government knows, will result in enormous outpourings of anger by a community desperate for him to remain behind bars, a lynch-mob mentality that will erupt in street protests and be borne along through a relentless media campaign.

From 1978, Percy's custodial situation has been assessed by the Adult Parole Board, which reports to the Executive. The board is required to furnish, at least once a year, a report concerning any Governor's Pleasure prisoner. While the board has no jurisdiction to release a prisoner, its recommendations are considered by the Governor and they have the power to cancel a super vision order and return a person to safe custody. Each year, it has reached the same conclusion: that the lack of a secure alternative facility for Percy, his reluctance to undertake any exploration of his mental state and his perceived danger to the community ensures that the Board never recommends he be transferred to a psychiatric hospital – which is where he wants to go.

From 1990, until his last parole board hearing in 1998, records show that Percy expressed his wish to be transferred to the psychiatric facility at Mont Park, now called Rosanna Forensic Psychiatry Centre. He wanted, he told them, to be dealt with in the same way as other people under Governor's Pleasure orders. He was willing to cooperate in discussing his problems so he could help facilitate his treatment. And each year, the board has refused. It reasons that far from treatment being his objective, this highly intelligent prisoner has only one goal in his sights. Release.

By 1991, neither psychiatrists nor parole officers were any closer to getting to the heart of Percy's psyche. His hair had receded and only pathetic wisps of grey remain, perched on top of his scalp like a long-abandoned bird's nest. His skin had the sickly pallor of one who has spent too long indoors. Professor Richard Ball decided, for his annual assessment of Percy that year, to take a different tack with Percy, waiting until he was comfortable and his cigarette lit before he started the questioning. First came the small talk – Hello, Derek, I trust you are well – and the shuffling of papers as the formal interview starts. Then Ball went in hard with a question he hoped would slip under Percy's guard, something that would grab his attention and prompt him to open up. 'Tell me, Derek, why do you think society takes such a dim view of people murdering children?' And he was astonished by Percy's response, as his eyes suddenly crinkled and his thin, sullen lips, covered by a bushy beard, opened wide in a laugh, his first in twenty years. Ball repeated the question, watching him closely. 'Why do you think society takes such a dim view of people murdering children?'

'Why? Because there would be nobody left, would there?' And just as suddenly as it had started, Percy's laugh – girly, high-pitched – stopped, his smile faded and his eyes glazed over. He was flat, emotionless again, in safe retreat behind his mental armour.

In 1993, Ball tried again. Instead of skirting details of Yvonne's murder, he confronted Percy with them, laying them out piece by piece in unflinching, graphic detail. The abduction, the torture, the mutilation, the smearing. He watched Percy intently for any sign of discomfort or latent remorse, and found nothing. Did he think about the girl's murder? Ball asked.

'No,' Percy replied. 'She could have been hit by a bus a week later and died.' He did not appear distressed in any way when he said that, Ball noted. There was no evidence of sweating or a raised pulse rate. His respiratory rate remained unchanged, his colour was no different and his eye contact remained exactly the same. 'I might,' Ball observed, 'simply have been talking about the kinds of cheese that one eats.'

The same year, Professor Paul Mullen gave his assessment of Percy's sanity. 'The wisdom or otherwise of the court's findings into Mr Percy's case may be open to question, but it is not open to modification,' he wrote.

In 1995, the Victorian Attorney-General Jan Wade articulated the community's fears in blunt language. 'I request that I be informed of any proposal to transfer Mr Percy to a psychiatric facility, and that any treatment plan proposed for Mr Percy take full account of the need for the strictest security at all times,' she demanded.

If Percy was aware of the angst that surrounded any debate about his move to a psychiatric hospital, he gave little sign of it, beyond petulantly noting that he should be given the opportunity for change. In yet another assessment with Professor Paul Mullen, in 1997, the psychiatrist noted that this long-term prisoner was pleasant and cooperative. 'He has long experience of such interactions. Mr Percy would be a candidate for transfer to a new forensic hospital when hopefully that is completed. Currently the objective with Mr Percy can only be reasonably humane long-term detention.' It is Mullen's opinion, expressed to colleagues, that although Percy is not mentally ill, his release into the community, while he is not of sufficiently advanced age to negate any sexual urges, would be highly dangerous.