Video footage shows Nicholas Salvador trying to push through the fence with the blade while the children are gathered up by their mother only a few feet away on the other side.
A police helicopter captured the moment a machete-wielding attacker tried to smash into a back yard where children were playing, moments after he decapitated a great-grandmother.
The 25-year-old had already severed the head of Palmira Silva, 82, in her nearby yard in the north London suburb of Edmonton last September. Prosecutors and defence lawyers each accepted the advice of psychiatrists that Salvador, who was staying with friends at a neighbouring property at the time of the attack, was suffering from paranoid schizophrenia.
Salvador is seen crashing through gardens behind homes as police desperately try to warn residents of the imminent danger.