Advice needed

Ok, here goes... Our dogs used to be fine out and well behaved on and off the lead until the neighbours got a terrier type dog that very aggresivly attacks the fences and trys to get to my (or any other dog/s) that walk past. Luckily it only barks at passing people and children.

The problem being our two big dogs (a malimute & german Shepard X) are getting increasingly aggitated and defensive. We can no longer let our dogs into either the front or back gardens as the next door terrier is always out and attacking the fences. We don't wish to be responsible if the terrier gets out and got hurt. It has in the past got out of its garden and come to our front gate and tried to get to our dogs that way.

We have the devils own job walking past the neighbours to exercise our dogs and sadly we have to pass either the front or back of their house to get out.

Other people have also complained (to no avail) as one of their fences runs along a small public footpath.

Away from the area if we visit friends etc our dogs become less defensive again. is my only soloution to sell our house and move my family or is there something or someway around this problem as our two girls are getting harder to handle as we walk past??
Thanks for any help.
TKB