THE police team sweeping forgotten corners of a council house garden yesterday were watched by dozens of residents.

They looked on as the specialists, in blue overalls, searched for the knife that killed Julie Smailes - a murder weapon which has eluded detectives for nearly eight years.

Neighbours stood at their gates in the quiet street of Briardale in Delves Lane, near Consett, County Durham, to watch the unfolding drama.

Talking in low tones, their conversations were punctuated by the occasional bleep from a metal detector, and the steady, wet hacking sounds of spades cutting through soil.

The dig dredged up much more than earth, coal and the occasional roof slate. It also brought back memories and myths bound to a murder that refuses to go away.

"You hear so many stories now that it is hard to know what to believe," said neighbour Dean Laing.

Detectives have long maintained they know who was responsible for killing Miss Smailes. Their investigation has featured bizarre twists and turns, taking in at least two murders, a suicide and a suspicious death.

The sales manager was found dead at her house in Wingrove Terrace, in the village of Leadgate, near Consett, on October 30, 1996.

Firefighters made the grisly discovery when they arrived to investigate smoke pouring from the end-of-terrace building.

She had been tied up by the wrists, stabbed more than 50 times and strangled. The killers then faked a burglary and set several fires in the house to destroy the evidence.

Despite an emotional appeal for witnesses the month after her murder by Miss Smailes' mother, Joy Gilmour, - coupled with a reward of £10,000 from Sun Microsystems, where the victim worked - no one came forward with information.

For seven years, it appeared the killers had successfully hidden their tracks.

But last October, new DNA techniques meant that forensic scientists were able to re-examine microscopic samples of blood and fluids from the murder scene.

They placed prime suspect John Thompson at the house the night she died, along with up to four other people.

Thompson hanged himself in August 1998, aged 27, days after 18-year-old babysitter Rachel Tough was found bludgeoned to death at his home in Warwick Avenue, Moorside, near Consett.

His body was discovered in woods near Hownsgill Viaduct, known locally as Gill Bridge.

Detective Superintendent Harry Stephenson, who has been in charge of the investigation since November 2002, said: "If John Thompson were still alive, we would have enough evidence now for him to stand trial for the murder of Julie Smailes."

His team is now concentrating on finding the others who were either there to witness Miss Smailes' grisly demise, or took part in the killing.

The house at the focus of the murder weapon search has its own long, blood-spattered history of death and intrigue.

Its tenant at the time of Miss Smailes' death was Emma Kennedy, a member of Thompson's tight-knit inner circle, and police know that Thompson was a frequent visitor to her home.

In August 1998, her boyfriend, Malcolm "Mally" Hester, 28, was beaten to death with an iron bar by a gang when he went to chase them away from outside the couple's house.

Fears of a conspiracy were heightened when 22-year-old Miss Kennedy's body was found at the bottom of Gill Bridge, only yards from where Thompson hanged himself.

The police have always maintained she either fell or took her own life.

But an inquest in 2000 recorded an open verdict, after North Durham coroner Andrew Tweddle found there was not enough evidence to suggest she committed suicide.

Her father, John "Spook" Kennedy, has always believed that she knew who murdered Miss Smailes, and that they threw her off Gill Bridge to silence her forever.

But if detectives are right, and her garden yields the evidence they need to close the case, she may yet reach Julie Smailes' killers from beyond the grave.