He then sharpened his knife and told her he was going to cut her throat before plunging the blade deep into her neck. There was also evidence of a sexual assault.
He has been eligible for parole since 1998 but rarely turned up to the hearings.
At the latest hearing in August, the board declined parole, saying he had committed an "inexpressibly appalling murder" and that his "behaviour continues to be unsettled and uneven".
Ms Wardell's brother, Andrew Wardell - who was 15 when he discovered her body -- said Watkins had followed and killed his sister because she pulled a face at him in a bar.
She was mentally and physically disabled after suffering serious burns to more than half her body when she was three.
"For him to escape and police to say he's a dangerous person, you'd think he would have been in (higher security)."
Watkins has been classified as a minimum security prisoner for the past five years.
Corrections regional manager Terry Buffery said Watkins had his security classification reduced over time and he had behaved well in prison.
- NZPA
