The girl said her neighbour also came outside and started hitting Jasper with a stick in an attempt to end the attack, but it was too late.
"She collapsed in the driveway with her cat in her arms," said Ms Stone.
"He had used up most of his nine lives."
Paddy was later buried in the backyard.
Aleaha, a Clive School student, said she was now worried about the life of her other 12-year-old cat, Lucy.
Aleaha's grandmother, Diane Harris said her granddaughter was "totally traumatised" by the event and was suffering nightmares.
"It's just terrible for an 8-year-old to witness.
"She had to go and stay at her other grandparents' home that night after what happened," Ms Harris said.
However, last Friday's strike was just one in a list of alleged attacks by Jasper, according to Ms Stone.
Jasper has also been accused of attacking chickens just before Christmas.
It's also claimed he is linked to the disappearance of a goat and two more chickens belonging to a nearby neighbour.
The neighbour who lives on the property where Jasper is kept spoke to Hawke's Bay Today on the condition of anonymity and said she didn't witness the attack but heard dogs barking.
She said there was nothing she could do when she found Jasper attacking Paddy on her front lawn, which is unfenced.
"The cat was on our property so it wasn't like he [Jasper] had gone over into their backyard ...
"I poked him with my walking stick and got him out back, but the cat was already dead."
She said Ms Stone's property housed a collection of animals, including ducks, fowls and, at one stage, a pig.
"The place is just a whole mess, and the smell, oh my Lord."
She said before the attack, Jasper, who she described as a friendly pet, had spent a week in the pound after being caught without a valid registration.
"It cost me an arm and a leg to get him out of jail as well."
Jasper is registered to the neighbour's sister, who also lives on Kauru Rd.
The owner wished to remain nameless but said Ms Stone's animals frequently wandered on to her sister's property.
"They've got gates, why don't they keep their animals locked up? It's a zoo over there and our place has become part of that zoo.
"I really do think they've got too many animals at their house."
She said if Ms Stone's animals came across the fence and into people's yards their wellbeing was out of anyone's control.
Ms Stone said she approached animal control after the attack, but was told that, because she could not prove Paddy was killed on her property, she didn't have a case.
"We were hoping they would surrender their dog. It's killed our cat.
"We don't know what this dog is capable of and we don't know what he might do with the kids around."
She regretted not taking action earlier, following the alleged Christmas attack on the chickens, and said it might have saved Paddy's life.
A Hastings District Council spokesman said Animal Control had picked up a dog from Kauru Rd recently but had returned it to its owner.
HDC community safety manager Phil Evans said that, if the council receives a complaint about an animal attack, it will investigate.
"If we find an attack has occurred, then we take appropriate action; from a warning to a prosecution, depending on the severity and circumstances of the attack."
There is currently no investigation or prosecution being undertaken for any dog on Kauru Rd by council.
Council bylaws state that the owner or person responsible for the animal should keep the dog under control at all times. At the same time, they had to ensure the dog cannot leave any private property unless it is under the control of its owner or a responsible person.
