The children were the worst. Screaming and crying and soiling themselves, as he carefully sawed off their ruined limbs. You needed three goblins to hold them down, to stop them writhing so the saw didn't slip. And then when the limb was cleaved, you had to staunch the gush of blood, wrap it up, and hope, and pray. The problem was, goblins had no gods but death.

Septimus Marchpane was a slave. On his ankle was carved the mark of his owner – Cerulean, Prince of the Elves – but misspellled, his own blood the ink. Septimus had no possessions but his Leech's Pack, stuffed with all the poultices and bandages he could scavenge. He could not leave the Pits. Soon he would have no mother. He would die here in the forest.

Yet he considered himself lucky. Standing there beside his master Kwalin, sweating in the hot and the dirt at the edge of the fighting arena, he watched his goblin relatives hack at one another and was glad that the only blood he ever spilt was surgical. Five hundred elves, pale blue and thirsting for gore, hollered in the rickety wooden stands, chanting the names of their favoured fighters. Demanding more death. It was the last major bout of the year, to celebrate the return of the sky-city of Oxford (and its silver) to roost and trade above the Pits. On this autumn morning, the belly of the sky-city cast a shadow over the leaf-strewn arena, drowning out even the weary gas-lamps. Two goblins were bouting in the half-dark world below the cloud layer, two more victims of the elves that ruled that great pine forest at the heart of the continent. They were green-skinned and scrawny-thin, jumping in and out of each other's way, trying to put off the inevitable. Soon they would have to kill.

The crowd booed. This wasn't what they'd paid for. One of the goblins made a lacklustre swing with his two-handed battle axe, his knobbly knees wobbling as he did so. His weapon was far too big for him, with a shaft as long as he was high, and a crescent-shaped steel blade, ten inches wide. Barely a boy-goblin, he stumbled of balance as he swung, and his opponent skipped merrily out of the way. It was Julia, his mother, though enslavement encouraged you not to use that term. She was bat-eared and slender, with the apple-green skin all his bull-goblin stepfathers adored. She didn't return her young attacker's strike with her spear though. My mother, thought Septimus, trying not to feel proud. Julia had looked after him when no one else in goblin-town would even look at him, she was his mother, his best-friend. They'd spent his childhood slashing at each other with sticks, playing at arena-fighting, as none of the other boy-goblins would let him join them. But those days were gone. It was only her in the pit now and sentimentality wouldn't get her far…

There was a crash as a set of doors opened behind him. Septimus felt his feet shake as he swivelled round to stare at the figure who stood in the cavernous doorway. Brutus Cinnamon. Swamp-green. All hulk and bulk. He was one of the prize fighters, the bull-goblins the elves bred and trained up to actually win bouts. Who enjoyed it. Who got rewarded. Septimus shouted a warning at Julia and the poor boy-goblin, but his cries were drowned out in the cheering of the crowd. Brutus strode past, shoving him out of the way, bellowing curse-words and battle-cries.

Septimus stumbled to the ground, coughing and rasping as the dust filled his lungs. He felt Kwalin's firm hand pulling up. The old goblin was tiny, with ears as long as a raptor's wings and a scraggly-white beard that was longer still, but he was strong. His mouth was frozen in a jagged line. Septimus didn't know how Kwalin did it – decades of just standing and watching: didn't he ever want to leap in and stop the slaughter? But the old goblin had made him swear. They were only able to help the injured because the elves allowed it. And only when the fights were over, and the crowds melted back into the forest. It was one small mercy from a race bred for blood.

The noise they made as Cerulean, Prince of the Elves – in reality, a made-up title for the businessman and bandit who owned the Pits – stood up to greet Brutus was like a swarm of stinging bees. He gave the muscled goblin an exaggerated little bow. Julia and her opponent stood on either side of the arena, looking grateful at the chance to catch their breath, dodging the fruit and mud thrown by impatient elves. The Prince, wiping the dust on his violet suit, began to speak. Septimus strained his ears to hear, cursing at how small they were. All the elves and goblins could hear every word of course – the crowd screamed even louder, and Julia's face paled. Septimus looked at his master. He was staring into space, switching off for the bloodfest. The repulsive Prince was climbing back into the stands. Brutus thrust his fist into the air.

Then the wolves were released. They weren't wolves. Not really. Emaciated ape-men, covered in shaggy-hair, the remnants of some ancient experiment, caught by elf scavengers on the tundra. But still they lived up to the slur – the howling began the minute the cage doors were swung open. Starved and half-crazed, they leapt at the three goblins. Brutus drew his two swords, their blades diamond-sharp claws, paid for by a rich elf sponsor and taken from the very warwolves he now faced. The bull-goblin slashed making short work of the first wolf who leapt at him. Septimus gazed at the slumped figure. Most of its hair had already fallen out and now there was dark red patch across its stomach. He pitied the monster. It was as much a victim as the goblins.

The second wolf was fiercer. Mouth wide open, it tried to sink its teeth into Brutus' right arm. The bull-goblin's metal plating got in the way. But like a vice the wolf clamped its teeth onto the armour. Sparks flew. Brutus stabbed with the sword in his left arm but the wolf was too quick. He tried to shake it off as if it were just some biting insect. But now the wolf had his clawless hands round the bull-goblin's throat.

There was a crash as the goblin and wolf fell to the ground. They grappled with one another. But then as if led by some primal instinct, a third wolf had pounced on Brutus' assailant. The distraction gave the bull-goblin the chance to get free. And then he was on his feet and running towards the other side of the pit where Julia battled with five wolves simultaneously. The younger boy-goblin cowered behind her. Septimus felt himself smile again. Then stopped himself. It wouldn't make what was coming any easier.

Brutus was tearing into his mother's attackers. It should be me there! thought Septimus, as the big goblin disembowelled two of the wolves in a row, their intestines sprawling out like bloated slugs, dropping one of his swords in the process. He felt Kwalin's hand on his shoulder. A tidal wave of cheering spread through the stands when the boy-goblin toppled over. The arena was a temporary structure built of pine and Septimus could hear the faint creak of sagging wood in the background as the elves leap up and down in their bloodfrenzy. So busy were Brutus and Julia with their own wolves that they didn't see the creature who had bitten Brutus, slathering blood, fresh from killing the other wolf, race behind them. Septimus could see the boy had fainted at the sight of the wolf approaching him but then turned his face away as the creature began to gorge. That was too much even for a surgeon. The crowd was going wild.

Septimus saw Julia kill one, then two wolves, as she danced between them, thrusting her spear into their bellies, puncturing them like shrivelled balloons. Then Brutus took the other, slicing its head off with a slash of his sword. All that was left was the beast feeding on the boy-goblin's corpse. Brutus ran towards it, swords held out a like a gyrocopter's wings, the crowd hollering his name. Do it now, thought Septimus, do it now. Kill him while he's distracted!

She did try. She did indeed try. But her spear had stuck in the second wolf she'd killed, and when she yanked it out, the spearhead stayed there, buried deep inside the wolf. All she had was the shaft, made of half-rotten ash. But she rushed the bull-goblin all the same, charging at Brutus, swinging the stick. The crowd laughed as the bull-goblin caught the stick in his hand, tossing her like a doll to the ground. That caught the wolf's attention. Swallowing whatever chunk of the boy-goblin's flesh it had been chewing, it reared up on its hind legs, howling at the bull-goblin. It was a terrible sight. Three times as tall as any goblin or elf, this was a beast of war. For a second, Septimus though Brutus had bottled it. The bull-goblin just stood there staring at its black-haired form, claws hanging like stalactites and lips dribbling clotted blood. But then it was on him and Brutus' training seemed to kick in and he was slashing at the wolf, but it stood strong.

"Divorce yourself from what you see, lad," said Kwalin, squeezing Septimus shoulder. But it wasn't right, Septimus wanted to scream. It wasn't right that he had to watch and wait while his mother and all the others were cut up like vegetables for a stew. It wasn't right that when he stitched them back together, it was only to a see them thrown into a fight again. Now Julia was getting up. Shaking but she was still up. The stick in her hand. And Septimus couldn't stop himself. He had to help somehow.

'Get Brutus!' he shouted, 'He's far more dangerous to you!' Yet again the crowd were so loud he had no idea if she had heard him. Kwalin's hands clenched. A warning.

Septimus swore to himself as he watched Julia throw her stick at the wolf's legs. It was a lucky shot. The beast tripped over itself, its weight collapsing to the ground. There was a resounding crack. A bone broken. Then one stab from Brutus' sword and the thing was inert on the ground.

The crowd was screaming, drunk on blood. It was Julia's turn now, unarmed before the bull-goblin. Septimus felt the tears begin to slide down his face. He remembered the way, when he was still small, he used to climb on to her back, playing at knights and horses. Then, later, the way she used to mock his height, but had still broken those bullies' arms the day they had laughed at his ears. Perhaps a rational person might giggle at Septimus' anguish – she was just his mother, the womb from which his broken form had sprung, an incubator of the slave race. She was no different to all the other goblins he had seen die, had failed to save. But Septimus would never forget the way he had cried that day five years ago when they had taken her to fighting pits, her time as a walking womb over. He had wanted to go with her but, no, Kwalin wouldn't let him – the old goblin was half-blind, he needed an assistant and some sympathizer in the Pit Offices had persuaded the Prince to give up this one slave – this gangly hobgoblin freak – to the mad old healer. So since the day of his twelfth birthday, Septimus had stood here at the side of the pit like a coward, watching as goblin after goblin was humiliated, maimed and killed in the elves' gore-filled entertainment.

Now Julia was going to die too. She had her back against the far wall, watching as Brutus approached. But the bull-goblin sheathed his claws, and the Prince had his loudspeaker out again, shouting something about rewards and prizes. Septimus could see the leer on the Prince's face. The way Brutus was stumbling towards Julia, sword held aloft. The way he tossed his armour aside. Then he grabbed her, forcing her down onto the ground. Septimus had seen this happen before. He felt bile rise in his throat. Julia was trying to fight the bull-goblin off, scratching him with her nails. It was no use. He was strong.

Septimus hand went to his leech's pack. Kwalin was in another world again, trying to ignore the horror that was about to happen. But this was his mother. She had saved him from Brutus and his vile gang once before. Now it was his turn. Septimus hand clutched the scalpel, it was ice-sharp, a surgical instrument designed to slice through muscle, flesh and sinew. He elbowed his master in the stomach, and then he was sprinting across the pit, past the wolf bodies and the half-eaten goblin. Then the shouting started as the crowd began to notice. Arrows sliced past him but he was a bullet, tearing through the air, determined that for once, he would not be the watcher in the story, he would act, he would do what was right. The bull-goblin was too busy trying to get at Julia that he didn't hear the warnings from the crowd, or Septimus panting, or the singing of the knife as it sliced through the air, straight into the bull-goblin's exposed leg, finding the femoral artery with a surgeon's precision.

The blood gushed out. Brutus' scream was long and terrible. Septimus was flung aside by the enraged bull-goblin. Brutus brandished his sword, as he turned to gut his attacker. The blood was coming too fast, however, and Septimus scuttled out of the way of the bull-goblin's slashes. Brutus was like a steel-bladed windmill, arms everywhere, catching Julia with a glancing cut. Septimus felt his breath leave him as he saw the sliver of blood gathering at Julia's neck. Then it was a like a waterfall, and Septimus, cursing, could see Brutus had got her carotid. Images of his mother's laughing face flashed through his mind, and he felt himself moan, the tears coming thick and fast as blood.

Then the moan became a howl. The large wolf was awake. The crowd were cheering. This was a show that would be remembered for years to come! Little middle-class elf-children would re-enact it in their playrooms, and goblin-children would re-enact it in arenas just like this one for centuries to come. Septimus quaked as he saw the wolf bounding towards him, but he didn't care. He had failed his mother; death was something he welcomed. But the wolf didn't stop. Through the haze in his eyes Septimus saw the wolf leap into the crowd, over elves desperately trying to move away, over the wooden stockade and into the darkness of the forest.

Through bleary eyes Septimus saw Kwalin's hunched figure hobbling towards him. He could hear the angry buzz and shrieks of the crowd in his half-deaf hobgoblin ears, as the blurry forms of battle-elves strode over to cut him off from Kwalin, chains in their hands. He blinked as they loomed above him, his mother's face framed in red in his mind, ready to join her wherever godless goblins were sent.