Pauline tried to help her bleeding friend get home to the flat across the road she shared with her mum, dad and brother Alan.
She recalls Diane saying: "I don't believe it. She stabbed me."
It was only a short distance to the flat but Pauline felt her friend slumping even before they reached the school gate.
With the help of two other girls she got Diane across the road but by the time she reached the entrance to the flat, she collapsed.
Her father Jim, who had been alerted by another girl battering on his door, ran down and took his daughter in his arms.
He carried her upstairs and desperately tried to revive her as her mother Margaret and 15-year-old brother looked on in horror.
Jim tried to give her mouth-to-mouth resuscitation, Pauline said.
"I'm shouting, 'you're not doing it right'," she said.
"I could hear her gurgling. There was blood coming out her mouth."
The catastrophe inside the Watsons' home sparked a decades' long crusade from Margaret.
In the chasm left by her children's deaths, she set out to challenge the power of the media and hold them to account.
She said she was not able to rest because of the malicious lies printed about her daughter and demanded an apology from The Herald and Marie Claire.
The former dinner lady's campaign brought her into contact with prime ministers, lords, and Hollywood actor Hugh Grant's Hacked Off campaign.
It also led to her giving powerful testimony at the Leveson Inquiry into press ethics in November 2011.
She told the judge: "Just because a person's died, their reputation shouldn't die with them.
"It shouldn't be besmirched at the will of some sick journalist."
Pauline says Margaret was small, frail and grieving but she was an "absolute spitfire".
"She was a powerhouse but she was driven by grief and anger and rage pretty much the entire time," she said.
As we spoke, beside her on the sofa was her husband, Andy Thomson.
It took me a moment to take it in when they told me that Andy had been Alan's best friend.
That through all the tragedy and trauma, this couple found solace in each other and they've been married for 34 years.
Their little grandson is the light of their lives.
"We were kids and I got what she was going through because I was so close to Alan," says Andy.
"And then obviously when Alan passed away, it just drew the two of us even closer.
"And we're 34 years together, we're still going strong and always have been. And always will be."
"No one gives you a book on how to cope with trauma when you're a teenager," Pauline says.
"We were left to cope, and we helped each other. Our life hasn't been all trauma – not at all. But it has been a part of it.
"The most important thing for us was we wanted to talk about Diane and Alan, not just the names in the newspapers.
"For people to have a better understanding of them as kids – because that's what they were, they were kids. Just normal teenagers who should still be here."
If you have been affected by any of the issues raised in this story, information and support can be found at the BBC's Action Line website.