Woolwich suspect was victim of frenzied knife attack aged 16

Michael Adebowale, who remains in hospital, was caught up in incident in which fellow victim was 'cut to pieces'

One of the men arrested for hacking to death a soldier in a London street witnessed a murder and was himself stabbed in a frenzied knife attack five years ago, the Guardian has learned.

Michael Adebowale, who was pictured holding a blade minutes after the murder of Drummer Lee Rigby in Woolwich on Wednesday, had been caught up in an earlier fatal incident in January 2008 when he was 16.

One person was murdered in the bloody episode, having been "literally cut to pieces" by an assailant wielding a 12-inch knife, according to the judge at the trial that followed the incident, which happened on a housing estate in Erith.

Adebowale is now in a London hospital, under guard, after being shot by police at the scene where Rigby's body was found, stabbed with weapons including a knife, a cleaver and a machete. He and another man, Michael Adebolajo, have been arrested in connection with the murder.

Background information about Adebolajo, 28, was circulating soon after Wednesday's gruesome murder but it took a day before Adebowale's name began circulating in public. Relatively little has been known about his background until now.

A Greenwich neighbour of the 22-year-old said that after the earlier knife attack Adebowale disappeared for a year and converted to Islam, and that his character appeared to have changed.

The 2008 attack which Adebowale witnessed and suffered gives an insight to a life in chaos. It led to a trial that saw Lee James, 32, convicted of murdering an 18-year-old, Faridon Alizada, stabbing a 16-year-old in the neck, and stabbing Adebowale in the shoulder and hand.

According to information released by the Metropolitan police after the December 2008 trial: "Faridon Alizada was inside the flat with two friends (victims 2 and 3) when James entered the flat on the pretext of buying drugs.

"Having armed himself with a knife before going to the flat, he then attacked the three teenagers, fatally stabbing Faridon. Faridon died of his injuries at the scene.

"A postmortem later revealed two stab wounds to the chest over six inches deep, either of which would have been fatal."

According to a report in the local newspaper, the News Shopper, James went to the flat on the Larner Road estate from where drugs were sold. He visited it daily and was planning to rob those inside. Faridon was in the flat with the two 16-year-old friends when James entered at 3am, with another man. He was carrying a 12-inch knife hidden under his jacket and bought and smoked crack cocaine.

Sentencing James to life imprisonment, Judge Anthony Pitts said Faridon had tried to save the others, even after being stabbed. "He was literally cut to pieces by Lee James who went on to stab a third man, fortunately not so seriously.

"The murder was in the end only of one person but that was sheer chance. [Another victim] was wounded very, very seriously and was extremely lucky not to have been killed or incapacitated for life.

"Faridon had the extraordinary courage it seem to me to attempt to confront Lee James, not only to protect himself but also to protect the other 16-year-old. It was, of course, a hopeless mismatch."

The trial at Southwark crown court heard that James, a former bare knuckle fighter, accused Adebowale and the other youths, who were Afghans, of being members of al-Qaida and plotting to carry out explosions. The court heard claims that James was suffering from a drug-induced psychosis during the attack.

Madeleine Edwards, a family friend who lived in the same block of flats as Adebowale in Greenwich, south London, said he had been involved with a local gang – the Woolwich boys – when he was a young teenager and had been in "some serious gangland trouble".

She said he had been a witness in a high-profile murder trial and that his mother had said he had to "disappear for a while." He left for about a year and when he came back he appeared to have converted to Islam and had become distant. "He could see my disdain at the direction he had gone in," she said.

Police investigating Adebowale raided a flat on the fourth floor of a block in Greenwich on Thursday, about four miles from the site of Wednesday's attack.

Neighbours at the scene said the small flat in Macey House was the home of Adebowale, who they said lived there with his mother, although this has not been confirmed by police.

"I was so shocked when I saw his picture on the television," said Jonathan Ackworth, 42, who lives in the block. "I used to see him coming and going and would say hello – he seemed perfectly pleasant. Everybody is in total shock."

Ackworth said he had seen both suspects around the block of flats and the second attacker had lived at the address with his mother for several years and attended a local college in Greenwich.

Another neighbour, 22-year-old student Alexander Sargent, said: "I knew him mainly by sight. We'd see each other in the lift and say hello. He dressed quite 'street', if you know what I mean. I've not seen him around for a few months."

On video of the attack on Rigby on Wednesday, Adebowale can be seen carrying a knife, talking to passersby.

Footage shows him rushing at armed police when they arrived on the scene and being shot.

Adebowale and Adebolajo remain at separate hospitals where they are still too ill to be interviewed.