Sophie Lancaster, 20, was battered to death in Stubbylee Park in Bacup, Lancashire, in 2007.
In 2008 Danny Hulme, 16, was jailed for grievous bodily harm with intent.
Sophie's mother Sylvia said the Parole Board were changing his licence so he could visit Rossendale.
Miss Lancaster, a gap-year student, was begging the gang to stop attacking her boyfriend Robert Maltby, then 21, when they turned on her and kicked and stamped her to death.
Two 16-year-old boys were given life sentences for her murder in 2008.
Brendan Harris, of Bacup, who denied murdering her, was ordered to serve an 18-year minimum term and Ryan Herbert, of Bacup, who admitted her murder, was ordered to serve at least 16 years and three months although it was later reduced by nine months on appeal.
Hulme, from Landgate, Whitworth, was jailed for five years and 10 months after admitting causing grievous bodily harm with intent to Mr Maltby.
His brother Joseph, then aged 17, also of Landgate, and Daniel Mallett, also 17 at the time, of Rockcliffe Drive, Bacup, were also jailed after admitting the same offence.
Mrs Lancaster said she was shocked when the Parole Board informed her of the decision to relax Hulme's 10-year licence on Thursday.
She said: "I'm trying to move on and now I've got to deal with this.
"It's an insult to Sophie's memory and it means he can go within five minutes of where the Maltby family live."
Mrs Lancaster, who was recently appointed an OBE in the Queen's Birthday Honours List, said it had spoilt the honour.
She was honoured for setting up the Sophie Lancaster Foundation and her successful campaign to have attacks on subcultures treated as hate crimes.
She said she was now worrying that the other gang members might appeal and be allowed back to Rossendale.
Mrs Lancaster said the probation service were in the process of appealing against the decision and she was hoping the Secretary of State for Justice and Lord Chancellor Chris Grayling could overturn the decision.
The Parole Board and the Ministry of Justice said it was unable to comment on individual cases.
The mother of a woman murdered by two youths because she was dressed as a goth has said it is an insult one of their accomplices is being allowed back to the area.