Detective Inspector Benjamin Bullock, second in command on the murder investigation, told the public inquiry into Stephen's death that he believed local teenagers had been threatened by associates of Clifford Norris, a notorious south-east London criminal and father of David Norris.
"It came to our notice on one occasion that there were some people going around, warning off people in general on the estate," he said. "I believe they were connected with the Norris father, but I have no direct evidence of it."
David Norris was one of five white youths later charged with stabbing Stephen to death at a bus stop in Eltham, south-east London, in a racially motivated attack in April 1993. None of them was ever convicted.
Det Insp Bullock, who is due to retire next year, claimed witnesses were also deterred from opening up to police because of the media's "undue emphasis on the racist nature of the attack".
"Witnesses were under enormous pressure from the media and the hype of racist attack," he said. "It seemed to be the one thing reported, it seemed to take the headlines all the time, just the racist part."
Det Insp Bullock said that one of a number of regrets that he harboured about the conduct of the murder investigation was his failure to seek the help of Scotland Yard's Witness Protection Scheme. Most of the witnesses, he said, were "people of 17, 16 years old who were obviously frightened and didn't want to get involved".
The inquiry was told that Det Insp Bullock was given a damning professional appraisal by Detective Superintendent Bill Mellish, the senior officer who took over the Lawrence investigation in July 1994.
Det Super Mellish told a Police Complaints Authority team last year that he found a "dispirited and negative team" working "in a dreadful environment".
He would have expected a good team leader to have tried to "rally morale, be tenacious in the quest for evidence and motivate a tired workforce", he said. "In the event, I found quite the opposite. I cannot recall one innovative or positive strategy emanating from DI Bullock."
Questioned by Edmund Lawson, QC, counsel for the inquiry, Det Insp Bullock agreed that there had been "an unreasonable delay" in acting on an early tip about the killers' identity. But he denied that he had shown "little or no interest" in "important and specific" information volunteered by a man who came into the police station less than 24 hours after the killing.
"There was interest, but at the time I was up to my eyeballs in other things," he said. "By the time I was free, he had left the station. If I have any regret, it is that I didn't see that man."
The inquiry continues today.