Sex offender strikes return deal with govt

CANBERRA - Notorious paedophile Dennis Ferguson will move from his Sydney public housing unit - but retains the lease and can return when he wants.

In a deal struck with the New South Wales Government yesterday Ferguson, 61, will be temporarily relocated in a bid to defuse continuing local anger.

After days of negotiation following the Government's admission that it was powerless to force him to move, Housing Minister David Borger said Ferguson still held tenancy of the Ryde unit despite the planned move.

"The priority is to find a long-term solution for his accommodation," he said.

But Brett Collins, of the prisoners' rights group Justice Action, said Ferguson's home in Ryde has been preserved and there had been an acknowledgement from the Government that he had the right to live there.

Ferguson, who served 14 years for kidnapping and raping three children, had been run out of a series of Queensland towns before making his stand in Sydney.

While locals prepared for their protest meeting and strung "warning, paedophile" banners outside his home, Ferguson said he would only leave "in a pine box".

One neighbour made a mock coffin and left it at his door.

The potential for violence continued yesterday, with a man charged with stabbing another in a fracas outside Ferguson's home.

State Premier Nathan Rees appealed for calm.

"This is a vexed issue [and] our key priority is the protection of the community and that includes obviously children in the first instance," he said.

"But secondly as Premier of the state I'm also responsible for harmony in the state and cool heads need to prevail."

Prime Minister Kevin Rudd also said that people should not take the law into their own hands and that even when the laws were uncomfortable they must be obeyed.

Meanwhile, the Sydney Morning Herald reported that 11 of 16 sex offenders on extended supervision orders at the end of August were taking testosterone-blocking "chemical castration" drugs as a condition of their release from custody.