'We hope that this will be a historic judgment,' said Wang Ling, the lawyer from Beijing-based Cailiang Law Firm who defended Zhang free of charge. 'Historic in persuading residents to better protect their property and legal rights.'

Disputes between developers and owners of homes they wish to demolish are widespread on the mainland. Threats, intimidation and violence are used to force residents who refuse compensation to move. In some cases, water, electricity and access to transport are cut off. Well-financed, armed with many people and licences from city governments, developers usually win disputes against families, who have little money or connections and no political support.

In March 2007, the enraged resident of a home in Suzhou killed two men who had come to demolish it.

The Benxi case sparked an intense online debate over whether Zhang was justified in killing the demolition man in the name of protecting his private property. Zhang lived with his wife, baby daughter and parents in a small house in Xinlitun, eastern Benxi, an old industrial city of 1.5 million people. He worked in a steel plant, earning 40 yuan (HK$45) a day. Since 2005, the city has embarked on large-scale redevelopment involving the demolition of 60,000 homes.

In May 2006, local developer Hua Xia obtained the right to redevelop the Xinlitun site into an estate of luxury villas. Residents were offered compensation; most accepted but a dozen refused, including the Zhangs.

To force the residents to leave, the developer organised teams to threaten them, resorting to violence in some cases. The city government issued an order at the end of 2006 to stop Hua Xia using illegal relocation methods. Under Chinese law, a company is without the right to compel residents to leave; this right rests with agencies of the government.

Hua Xia continued talks with the Zhang family; it also sent a team that demolished part of the home. On May 12 last year, the two sides held more talks but failed to agree.

On the morning of May 14, Zhao Jun and five colleagues entered the home, where they found Zhang, his wife and daughter. They started to beat them and prevented his wife and daughter from leaving. Enraged, Zhang used a vegetable knife and stabbed Zhao several times, before running away. The team then demolished the rest of the house. Two days later, Zhao died of blood loss.

Zhang fled to Beijing and made contact with Cailiang, well known for its involvement in land redevelopment cases. In June, after consultations with lawyers of the firm, Zhang gave himself up to a police station in Beijing in the company of a lawyer.

'We accepted the case, free of charge, because Zhang needed our help,' said Wang Ling. 'Also this was a very representative case, which, if handled well, could have an impact on law in China.'

Zhang was taken to Benxi where he was charged with murder. The case opened on March 30 this year.

The defence argued that Zhang's was a legitimate act of self-defence, given that his family was enduring violence and he was defending himself, his family and his home from further damage. It said that Zhang had lodged complaints with the police of the violence against him, but they had taken no action.

It argued that the constitution outlawed infringement of the legal assets of citizens and that only in the case of 'public interest' did the state have unconditional rights over private assets. In cases involving commercial development, it was up to the individual himself to decide whether to transfer that right. 'Under the law, the developer and the resident have equal rights,' Wang said.

'Public interest' means the building of a road, railway or other public facility. In public interest cases, the state has the right to order the compulsory demolition of homes.

On September 4, the court gave its verdict. It said that when Zhang had stabbed the victim, he was defending his legal rights in an illegal situation. 'His self-defence evidently exceeded the necessary limit but, since it was self-defence, the sentence should be reduced.' It also took into account the fact that Zhang had given himself up and sentenced him to three years in prison, suspended for five years.

The developer gave him 500,000 yuan in compensation. He and his family plan to leave Benxi and start a new life elsewhere. The developer also gave a home of 78 square metres to Zhao's family, and 300,000 yuan in cash and a job to his widow.

The case persuaded the Benxi government to draw up new regulations that outlawed methods commonly used by developers to force residents to leave, such as cutting off utilities, threats and intimidation, and making these criminal offences for the first time.

Both sides accepted the verdict and neither appealed. Zhang Jian declined to comment. In remarks to mainland media, he said that if his family were threatened again in the same way, he would resist: 'I never want this to happen [again] for the rest of my life,' he said.

'This judgment has great historical significance,' Professor Ji Weidong, dean of the Koguan School of Law at Shanghai Jiao Tong University. 'The defendant walked free and received compensation.'

Writing in the Caijing magazine, Ji said that 'appropriate self-defence' distinguished between legal rights and the policy of a developer and made clear the independence of the judiciary from local governments and companies.

The case also made a clear distinction between the development of land for public and for commercial purposes.

'One reason for the case was that property rights for houses are vague,' wrote one internet user calling himself Wu Yue San Ren. 'Though individuals are absolute owners of houses, the land on which they are built belongs to the state. Since the rights to the land are not absolute and complete, the right to defend one's house is not fully acknowledged or guaranteed.'

Asked how far the Benxi case would influence similar disputes in other mainland cities, Wang said the continental system of law was in play, unlike Anglo-Saxon countries, where individual judgments make law. This means that new laws have to be written and approved by the legislature. 'The greatest importance of the Benxi case is the protection of homeowners' individual interests,' he said.