It was built in 1844 for Stephen Henty, a member of the family that pioneered this first European settlement in the state.

It sits above Portland harbour on the corner of two of the town's main shopping strips, Julia and Bentinck streets.

The Old London hasn't operated as an inn for a very long time. If it did reopen, it would be unlikely to draw much custom.

The inexplicable ghastliness of what happened within its stone walls 20 years ago this week would spook you out of your thirst.

On the afternoon of Friday, May 3, 1991, someone walked into the Old London - then a hairdressing salon - and used a knife and possibly a pair of scissors to slash the lives out of two grandmothers. The weapons have never been found.

There seemed no motive beyond possibly robbery for the killing of hairdresser Claire Acocks, 49, and client Margaret Penny, 58. The salon was ransacked, but only a miserable $100 was missing.

Two decades on, all the questions sparked by that day's events remain unanswered.

Could one person be responsible for overpowering and murdering two women?

How was it possible that such a hideous act could occur in the middle of a Friday afternoon on one of the busiest corners in town without anyone noticing?

Mrs Penny had arrived for her appointment at the Old London Coiffure, which had been in business for more than 20 years, shortly after 3.15pm. No one raised an alert until 4.30pm, when nearby shopkeepers noticed the salon was locked and no lights were on. A designer working in an office across the building's courtyard later recalled hearing what sounded like doors slamming and high-pitched cries but he had dismissed it as the high jinks of children.

The salon's owner was called, and what she found meant nothing would be the same in Portland again.

In one of those macabre coincidences that could happen only in a country town, one of Portland's police officers who converged on the scene was Mrs Acocks's son, Senior Constable Tim Acocks. He was sent home suffering shock.

Homicide detectives who flew in from Melbourne soon ruled out the idea that the killings might have been retribution on Mrs Acocks because her son was a local policeman.

The single clue that emerged was the evidence of a resident who saw a man walking briskly away from the Old London mid-afternoon. But the witness did not notice whether the man was spattered with blood, which police were sure would be inevitable, and the description was vague.

As detectives, led by the homicide squad's Detective Sergeant John Morrish, began collating hundreds and then thousands of scraps of information, a lot of it useless, imagined or little more than well intentioned, it became clear there was going to be no early arrest.

Many in the town of 9000 hunkered down in fear, and the sound of door locks snapping closed, rusty from disuse, was loud. A former reporter from the Portland Observer, Dave Reynolds, recalled this week that his wife Glenda - herself a hairdresser - was so afraid of staying home that she and their young children spent the weekend in the newspaper's newsroom, a baseball bat and golf club handy.

Portland, for more than a century and a half a relatively insular settlement, was enduring one of its many transitions at the time.

Once a town where almost everybody knew everybody else, its population and the relationships that went with it were in flux. The huge Alcoa aluminium smelter just out of town had been operating for a bit less than five years, and it had brought many new residents to Portland. Strangers, the old people would have called them.

The recession of the early 1990s afflicting most of Australia was biting hard in Victoria, and taking a bitter toll on Portland.

The Pyramid building society based in Geelong had collapsed only the previous year, taking with it $1 billion of people's savings. Large numbers along Victoria's western coast had placed their faith and their money in Pyramid. In Portland, shops were closed and boarded up, unemployment was high and the town was burdened with gloom.

As well, no one quite knew what was going to happen to jobs at the local abattoir, run for most of the century by Thomas Borthwick and Sons. Borthwick no longer operated the meatworks. A company called AMH had reopened the plant, but the meatworkers' union had been beaten into submission and job security, always uncertain, was a matter of deep concern for many families.

The pall deepened massively with the Old London murders. Nothing like it had happened in Portland, though it is stretching it to say it was the end of the town's innocence.

This was a place with a gritty history, as befits a settlement that began in the wild whaling days. A set of stocks once sat out the front of the old jail above the harbour, and one of the first official requests from the town fathers was for the colony's governor to send a flogger to whip miscreants into shape. Out the beach a bit was a place named the Convincing Ground, where whalers armed with muskets had massacred indigenous people in the early 1830s in the cause of convincing them to leave alone a whale that had washed up. And the wharves, where seamen from all corners of the world arrived aboard merchant ships, had long been places of intrigue.

The detectives had a cast of characters to investigate.

Could a worker from the abbatoir, familiar and skilled with knives, have gone mad and taken out some bottled-up fury on the two women?

Portland, linked to the world's sea lanes, had long had a community of drug users, too. The marijuana tide of the late 1960s and early 70s had transformed into an LSD outbreak, followed by heroin and latterly amphetamines. Trawler fishermen had to remove first-aid kits from their boats when they returned to harbour because any morphine on board would be pilfered. Police probing the murders had to check what ships might have been in port and make inquiries about crew members.

And, of course, there were lists of ''usual suspects'', both in Portland and beyond, though there were very few usual suspects for a crime as senseless and brutal as this.

One promising lead was the suggestion that a yachtsman, later convicted of another unassociated murder, had been sailing from Adelaide to Melbourne via Portland at the time of the murders. But police could not put together sufficient evidence to make a convincing case.

Over the years, every lead ended up in the same frustrating lane: a dead end.

Eventually, one of the hundreds of police interviews led to a Portland man named Gordon Smith, a former army apprentice electrician suffering schizophrenia, a condition not helped by his use of amphetamines.

By 1995, police felt there were such similarities between the Old London killings and the murder of a woman in Sunbury that a single killer might be responsible.

Renita Brunton, 31, was slain with knife in a Sunbury used-clothing shop on November 11, 1993.

Detectives interviewed Smith about all three killings after a relative told police he had confessed to the Old London murders. His mother, however, has always maintained he was innocent and, in his confused mental state, had come to believe he might have been responsible.

He was not charged, but told his mother he had to leave Portland because everyone was pointing the finger at him. He flew to Melbourne to stay with a cousin in Seaford. Soon after, depressed and professing he was suicidal, he underwent a brief psychiatric assessment and then moved into a Salvation Army hostel for three days.

Within 10 days of leaving Portland, Gordon Smith was dead. He was found hanged from a rafter in Melbourne's St Paul's Cathedral in early July, 1998.

Police sources say too much attention has been paid to Smith, persuading many that his death meant the investigation was over.

It has never been closed.

The prime suspect for the killing of Renita Brunton, anyway, is not Smith, but serial killer Peter Dupas. Dupas was jailed for life last November for murdering Mersina Halvagis when she was visiting her grandmother's grave in Fawkner cemetery in 1997. Police looked at Dupas for the Portland murders, too, but found he was in jail at the time.

Twenty years later, there are Portland people who avoid walking around the corner of Julia and Bentinck streets. There are ghosts in the building there, and they have been granted no rest.

-This story originally appeared in The Age on May 7, 2011.