A former Melbourne Grammar schoolboy who believed he was the son of a werewolf has been found not guilty of murdering a homeless man on the grounds of mental impairment.

Easton George Woodhead, 20, stabbed Morgan Wayne “Mouse” Perry to death in January last year after the 42-year-old stole his motorcycle.

Woodhead had been smoking marijuana and playing computer games for hours in his apartment in Flinders Street before going to Enterprize Park near the city’s aquarium, where Perry lived, to retrieve his bike around 5am on 5 January 2014.

A neighbour who had been playing video games with Woodhead said he seemed “normal” before the stabbing, the supreme court in Melbourne had been told. But when Woodhead got to the park and saw his motorcycle under some blankets he told Perry he had just discovered his father was a werewolf.

Woodhead demanded Perry and others in the park help him start his bike and began throwing around Perry’s possessions when he refused.

Woodhead then stabbed Perry so violently the victim’s hand was nearly sliced off. Perry was admitted to the Alfred hospital where he died from blood loss caused by multiple stab wounds.

Following his arrest, Woodhead pleaded not guilty to murder on the grounds of mental impairment. During Woodhead’s murder trial, the court heard he suffered from schizophrenia.

Defence barrister Michael Tovey, SC, said Woodhead believed he was God, that he had a connection to the devil and that he could receive messages through his X-Box.

On Monday, the jury found Woodhead not guilty of murder. But he will remain in prison for at least two more weeks because there is nowhere for him to go.

Justice Jane Dixon heard there were no available beds at the Thomas Embling forensic hospital. She remanded Woodhead in custody until 16 November, when she will hear submissions on where he should go next.