David Morgan, who launched his terrifying rampage at Rackhams department store in Birmingham in 1994, was transferred from Broadmoor top security hospital to a secure psychiatric unit at the Hatherton Centre, St George’s hospital, two weeks ago.
There he will undergo continuous assessment and rehabilitation and Mike Cooke, chief executive of South Staffordshire NHS Trust, said he will be released if given the all-clear by doctors - possibly considerably earlier than recommended at his trial.
The move - rubber-stamped by Home Secretary David Blunkett - comes just six years after a judge declared him too dangerous to be considered for parole before he had served at least 12 years.
Morgan wreaked havoc in the store’s cosmetics department wielding a 12in butcher’s boning knife and a bread knife.
Mr Cooke said it is too early to say when Morgan will be allowed on escorted shopping trips in the town as part of his treatment programme, with a view to eventually releasing him back into the community.
He said: "We have a unit at Stafford for offenders with mental health issues who have come from high security units.
"He will not be allowed outside immediately but we are here to make progress with these people and if he has recovered then he will be let out, although I’m not sure when that will be - if at all."
Head of nursing at the Hatherton Centre Chris Marshall said a report which claimed police would not be notified for at least 24 hours if Morgan absconded was untrue and detective inspector Nick Baker, of Chase division CID, confirmed protocols mean they would be informed immediately.
Mr Marshall added: "If he is discharged there will be a lot of measures in place for him to be supervised in the community but at the moment we are a long way from thinking about that or where he will be placed."
But Derrington resident Jackie Bott is horrified by the news. She said: "I’m alarmed and dismayed - this man should remain behind bars for a long time.
"He is obviously a great danger to women. If the story is true, the people of Stafford need to be aware of such a monster being in their midst.
"That the rumoured shopping trips may take place at all, let alone in Stafford or somewhere nearby is extremely frightening, as is the possibility of him languishing in a nearby hostel - and at our expense.
"This man has a history of schizophrenia, depression, psychotic disorders and evil thoughts of attacking women. I’m scared to death and I can’t understand why this is being allowed to happen."
