Ex-soldier Douglas McNaught, 61, had to be rushed out of Prestonfield Avenue under police protection and has now been re-homed.
It is thought trouble started when unfounded allegations were made against McNaught, who was jailed in 1993 for sex offences against a young girl.
Last week, his car was vandalised and he was harassed by a baying mob. He was taken away by the police only to be returned a few days later.
Trouble started again and the decision was taken to re-home him elsewhere in the city.
A local source said: "We heard about his history and that he'd recently been kicked out of Wester Hailes.
"Some of the neighbours decided to take action and the police were called to remove McNaught from the house.
"He was brought back to the house by plain-clothes police officers from the sex offenders' unit a few days later, but on Thursday the neighbours came back and started banging on his windows.
"They must have been monitoring him because as soon as the disturbance started, two plain-clothes police officers stepped out of an unmarked car and identified themselves.
"The neighbours continued shouting and the disturbance got so bad that they had call for uniformed back-up.
"The neighbours aren't happy about a sex offender living amongst them.
"Because of what happened on Thursday, he'll definitely not be back at that house."
McNaught was jailed in Aberdeen in 1993 after admitting using lewd, indecent and libidinous practices and behaviour towards a young girl.
The court heard the victim had been distressed and initially too frightened to tell anyone.
Upon his release from a six-year sentence, McNaught moved to Wester Hailes, where he reportedly began living with a teenage girl.
Police then placed him under a sexual offences prevention order to prevent him having any further contact with under-age girls.
A Lothian and Borders Police spokeswoman confirmed that McNaught was currently the subject of a prevention order.
He has been re-housed and his current whereabouts have not been disclosed.
She said: "Following concerns for the safety of an individual living in the Prestonfield area, and damage to a vehicle, police assisted in re-housing a member of the public.
"Inquiries are ongoing to trace the person responsible for the vandalism.
"Police do not discuss the security arrangements of any individual.
"Because this man is a registered sex offender, he is protected by law and we are not allowed to discuss his circumstances any further."