Not dog, vicious or otherwise, should be allowed to wander on the street alone. I don't understand why such owners get dogs at all.
Apart from the risk to others in the case of a vicious dog, he may well cause a car, bike or motorbike accident possibly resulting in serious injury to other people not to mention himself.
I feel sorry for the dog, and the OP of course.
I wouldn't hesitate to report these people to the dog warden. I love dogs and have one myself but I would rather see one humanely destroyed, if it comes to that, than left wandering the streets scaring children and/or getting hurt in an accident.
Good luck. I hope you get the problem sorted out.