'How can I tell the kids that they don't need to carry knives?'

After the murder trial the decrepit block where he died stands ready for demolition, while residents fear little has changed

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Derek Foster pointed towards the crumbling chimney that tops the stairwell where Damilola Taylor died. "It's coming down in three weeks," the site manager said. "Not even the flowers will be left."

The decrepit housing block, with its smashed windows and barricaded doors, just yards from where Damilola, 10, was stabbed, is one of the last vestiges of the old North Peckham Estate.

Hordle Promenade West, as the building is called, and the stairwell where the boy was found by a construction worker, were spared the wrecking ball because they represented evidence during the Old Bailey trial.

All around it a new North Peckham Estate has sprung up as £280m of urban regeneration funds were poured into this corner of south-east London to erase the squalor in which Damilola died. Where once there were dimly lit walkways leading to rubbish-strewn alleys stinking of urine, a new generation of low-rise housing dotted with communal gardens and wide streets has risen up.

But less than 24 hours after two teenage brothers were acquitted of killing Damilola, residents were divided on whether the legacy of the schoolboy's death was a brighter future.

Kehinde Nowaiwu, 32, wheeling her three-year-old daughter towards a new kindergarten, said: "What has changed? The thugs have just got nicer surroundings. It was no surprise those two got off.

"I don't know whether they did it or not but people are so alienated here they won't cooperate with the police to give the evidence that would nail whoever did it. This is about poverty of spirit, not body."

Anger was the overriding sentiment on the streets of Peckham yesterday.

Jeremiah Argento, 28, a youth worker on the estate, said: "How can I look the kids I work with in the eye and tell them it is safe, that they don't need to carry knives?

"This estate is improving but I have to ask myself, is it only because of what happened to Damilola Taylor? And all the time whoever did it is still walking around free – it sends all the wrong messages."

A few hundred yards away, the stairwell, boarded up and its entrance covered in black anti-graffiti paint, served as one grim memorial to the events of the past 15 months.

Southwark Borough Council confirmed that Hordle Promenade West is scheduled for demolition by the end of next month. At the request of Damilola's parents, nothing will remain of the spot where their son died, and no memorial will be mounted on the area.

Mr Foster, 53, said: "All I know is that the instructions are that it all comes down. I suppose they would prefer that nothing of what caused this to happen is left standing."

The real monument to the smiling Nigerian schoolboy is a nearby building which bears his name in metre-high steel letters in the heart of the new estate. The Damilola Taylor Centre, a £700,000 conversion of a pre-existing building, will open in July as a youth and community centre.

Yvette Nichols, 56, who lives opposite, said: "Things have got better – it feels safer here. The question is, can we make sure it stays that way when the politicians and the telly people have gone?"