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His rampage was so ferocious that armed police began smashing windows to rescue residents, warning them to run for their lives amid fears of a further attack.
Despite putting himself in serious danger, one officer - who was later praised for his heroic actions - even jumped onto a roof and desperately urged the young children to scramble to safety.
In the audio recorded alongside the CCTV, an officer could be heard saying: 'He's agitated and lethal ... he needs taking out.'
When police finally cornered Salvador, they were forced to Taser him six times during a violent and chaotic struggle in which Salvador bit a chunk out of one officer's leg.
The terrifying footage was released today after Salvador, from Enfield, also in north London, was found not guilty of murder on the grounds of insanity.
He's agitated and lethal ... he needs taking out
Police officer in the helicopter overhead
The defendant, who had pleaded not guilty throughout proceedings, will now be locked up indefinitely at Broadmoor maximum security hospital, the home of some of Britain's most dangerous killers.
The footage had been shown to the was shown to the jury, just metres away from where Mrs Silva's family sat in the public gallery. But the final moments of Mrs Silva's life had been edited out because it was deemed too distressing.
The family, who had been in court during the trial, wiped away tears as the Recorder of London Nicholas Hilliard QC said that Salvador had killed the elderly woman with 'extraordinary brutality and ferocity'.
He said: 'You thought you were encountering some demonic force which had taken on a human form. You could not have been more deluded.
'It is a mercy that she can have had no time to begin to comprehend what was going on. This gentle, intelligent 82-year-old lady should have been able to live her life in peace and with security, proud in the achievements of others, but that was not to be.'
The footage showed Mrs Silva, who was wearing an apron, approaching Salvador over her garden wall.
This gentle, intelligent 82-year-old lady should have been able to live her life in peace
Recorder of London Nicholas Hilliard QC
After a brief exchange, the defendant was then seen climbing into her flowerbed, where he stabbed her repeatedly and beheaded her.
The judge said that 'nobody could forget the mild and trusting way' that Mrs Silva had approached Salvador over the wall while he was clutching a knife.
After the attack, the court heard how Salvador showed signs of mental illness, repeating phrases like 'red is the colour' and 'I am the king' over and over again. The jury was told how he believed Mrs Silva was a supernatural entity.
The jury at the Old Bailey, who retired this morning, returned the verdict of not guilty by reason of insanity just 40 minutes later.
'It is a mercy that she can have had no time to begin to comprehend what was going on. This gentle, intelligent 82-year-old lady should have been able to live her life in peace and with security, proud in the achievements of others, but that was not to be.'
The footage showed Mrs Silva, who was wearing an apron, approaching Salvador over her garden wall.
This gentle, intelligent 82-year-old lady should have been able to live her life in peace
Recorder of London Nicholas Hilliard QC
After a brief exchange, the defendant was then seen climbing into her flowerbed, where he stabbed her repeatedly and beheaded her.
The judge said that 'nobody could forget the mild and trusting way' that Mrs Silva had approached Salvador over the wall while he was clutching a knife.
After the attack, the court heard how Salvador showed signs of mental illness, repeating phrases like 'red is the colour' and 'I am the king' over and over again. The jury was told how he believed Mrs Silva was a supernatural entity.
Psychiatrists concluded that Salvador - described in court as a 'decent man' - was suffering from paranoid schizophrenia and was legally insane when Mrs Silva died.
The jury at the Old Bailey, who retired this morning, returned the verdict of not guilty by reason of insanity just 40 minutes later.
In his closing remarks, Bernard Richmond QC, who represented Salvador, said that Mrs Silva 'was probably the least evil person'.
He said: 'It is one of the bitter ironies of this case that Mrs Silva was probably the least evil person you could think of. It is noticeable that throughout this trial her family have conducted themselves with a quiet dignity which is a tribute to both themselves and Mrs Silva.
'It is plain also that, when he is not unwell, Mr Salvador is somebody regarded as a decent man.'
Killing: The 25-year-old will not be locked up indefinitely in a psychiatric hospital
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Killing: The 25-year-old will not be locked up indefinitely in a psychiatric hospital
He added: 'Mental illness in whatever circumstances can be terrifying for the person. After this case is finished, he will have to continue coming to terms with the horror of what he did when he was unwell.'
Jonathan Rees QC also told jurors that there was no dispute that the correct verdict was not guilty by reason of insanity because Salvador was a 'very sick man'.
He said: 'This was, was it not, a deeply upsetting and horrific incident. Mrs Silva was not targeted because of who she was. She just happened to be in the wrong place at the wrong time.
'But for the efforts of the police and a measure of luck other people were not seriously injured or worse. The defendant was a very sick man.'
After the verdict was delivered, the judge commended all the police officers who worked to protect the public during the operation to capture Salvador.
He singled out PC Steven Robertson - the office who climbed onto the roof - whom he said should be 'highly and publicly commended' for his bravery in helping a family threatened by the killer.
The judge had asked them to put their emotions aside and consider the case in a 'cool, calm and dispassionate' way.
He said: 'The most innocent and defenceless of victims was killed by a man who was in the grip of mental illness and was himself helpless in the face of that.'
The Old Bailey heard Salvador spent his early childhood with his grandmother in Nigeria after his parents separated.
He returned to the UK to go to primary school in Hackney and secondary school in Edmonton before studying media studies at college.
In 2012 he claimed he had converted to Islam and began preaching and attending mosques but later spoke about becoming a Buddhist.
By 2014 Salvador was living alone in Enfield and working as a fitness instructor and billboard advert installer. His father was in Nigeria and his mother was in Nottingham.
A few weeks before Mrs Silva was killed, he moved in with his schoolfriend Dominic Thorne in Nightingale Road, Edmonton.
The Thorne family described Salvador as 'a real nice guy' and 'a happy, bubbly gentle giant type person' before his behaviour deteriorated.
Tragedy: The killer jumped over a wall into Mrs Silva's back garden and stabbed her with a machete, jurors were told
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Tragedy: The killer jumped over a wall into Mrs Silva's back garden and stabbed her with a machete, jurors were told
He started becoming obsessed with witchcraft, demons and the Illuminati and asked his friend Dominic, 25, 'When am I going to get my powers?' and 'Am I going to turn into a girl?'
Vivian Thorne, his friend's mother, suggested he see a doctor but he refused.
Salvador began drinking a bottle of brandy or whisky a day and the garage was littered with empty bottles of Corona lager. He also regularly smoked skunk cannabis and had taken cocaine, the court heard.
Then, three days before the killing, he lost his advertising job after failing to turn up for work.
At around 1pm on the day of the attack, Dominic's sister Bianca, 31, saw Salvador chopping something with a machete in the back garden and looking up at the sky 'like an act of worship'.
She went out to investigate and he told her: 'I have killed your cat.' When Dominic's brother Darius, 21, asked why, he replied: 'The cat is a demon.'
Darius and Bianca then took refuge in Darius' car outside as Salvador began trying to break into the back door of the house. Salvador then began looking for the family's other three cats before kicking down the door of another property.
He then came back out to attack Darius' car with a wooden pole and machete. Bianca was hit on the left shoulder with the pole before Darius managed to start the car and drive off.
Salvador was convicted at Wood Green Crown Court of possession of a bladed article in April 2014. He was sentenced to three months imprisonment suspended for six months.
The conviction emerged at a preliminary hearing for Salvador at the Old Bailey in September last year. No mention of the conviction or any potential breach of the licence period was made at the trial.
There was also no reference to any previous contact with mental health services.
Mrs Silva came to the UK in 1953 and ran Silva's Cafe in Church Street, Edmonton, with her husband Domenico.
After his death in 2008 she continued working at the cafe and maintained a vegetable patch in her garden.
At the time of her death she had two children, six grandchildren and one great-grandchild.
'We need to save life': Police officer describes ‘utter terror’ when killer Nicholas Salvador came within metres of children playing in their back garden
A police officer described his 'utter horror' as killer Nicholas Salvador came within metres of two playing children during his violent rampage through back gardens.
Enfield-based Inspector Doug Skinner was first on the scene, and was among the officers who put their lives on the line to rescue the youngsters and capture Salvador, after he had beheaded a defenceless great grandmother and two cats.
He said: 'I knew that Salvador was armed, had already killed and that many people were in immediate danger. Nothing can fully prepare you for that type of call or the scene we encountered.
DailyMail
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