Lyric discussion by Diogenes 

I believe it's a song about the punk scene of 1970s London, where it was hard to separate the hooligans from the pre-hipster hipsters. Some are harmless posers and some pretty dangerous thugs. I think the werewolf reference is a metaphor. Awesome song.

According to Wikipedia, the song was being played live as early as 1975, so this interpretation is unlikely.

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