Colin Stagg: I'm still coming to terms with being proved innocent

Having lived under a cloud of suspicion for more than a decade, Mr Stagg received more than £700,000 compensation for his ordeal.

The conviction of Robert Napper, who admitted manslaughter, cemented Mr Stagg's place as the victim of a near-miscarriage of justice. It was only this summer that he received a payout from the Home Office. He spent more than a year in jail awaiting trial before the case collapsed. Even after that, he remained a hate figure.

Mr Stagg told the Evening Standard: "I still haven't properly accepted how my life has changed so quickly. It was only a few months ago I was living on £45 a week and watching every penny. My main concern was feeding the dog and having a few pounds to buy a packet of fags. I said at the time of the Home Office award it was like winning the lottery. And it was. The shock still hasn't worn off.

"After more than a decade living on the breadline and being unable to get a job, it's only natural to worry about money. Yet I can't spend all that interest and a lot goes to build up the pot."

Since his windfall, he has embarked on a mini spending spree. He has bought a car, a big-screen television, a recording deck - he is an accomplished guitarist - and paid for his girlfriend Terri Marchant's patio. His first big purchase was the shiny, black 4x4 now sitting outside his home. "I wanted reliable transport to visit historic sites and beauty spots with my dog and take my girlfriend and her family for days out," he said.

He is determined to buy the three-bedroom maisonette on the Alton Estate in Roehampton, where he has lived since childhood. He is entitled to a five-figure discount from Wandsworth council. Even at the height of his infamy, he refused to move. "Nobody can understand why I still want to live here but this is my home and I love it," he said. "I feel the same way about my name. Down the years people have told me to change it and move away. But I'm a proud man and an innocent one, even when for years the general public thought I had got away with murder."

His pride is visible in the care he has lavished on his flat. Steep concrete steps to his pretty garden have been replaced by a wooden staircase and a decking veranda - complete with retractable sunshade.

Privacy fencing has gone up and a stout back gate. And, despite being cleared in the public's mind now Broadmoor patient Napper has been sentenced, he has installed low-level security lights and cameras. "You can't be too careful. There are still nutters out there," he said.

One thing he will not be splashing out on is a bed, despite Terri's pleas. He smashed and burned the marital bed when his wife left him in 1996 and has since slept on the sofa - often sharing it with his beloved labrador cross Jessie - or on a blow-up mattress.

He added: "It's nice to have been able to make these changes to my home. Until now money has been a problem. Now I can afford to invest in my home, but I don't have a 'spend, spend, spend' mentality. I've been poor too long. My one indulgence has been treating Terri's kids. They have taken me into their hearts and I'm enjoying family life for the first time since childhood."

One of his first acts on receiving his payout was to give £5,000 to a wounded veterans charity because "I firmly believe in looking after servicemen".

He adds: "For the first time in years I can see a future for myself. Once the recession is over I think I might look at investing in a small business - something which can keep me occupied. And I'd like to travel all over this country seeing the wild places I have always dreamed of visiting, but never had the means before."