The Dublin man -- who cannot be named for legal reasons -- was jailed for 10 years in October 2002 after pleading guilty to four counts of rape against his victims.
The pair bonded while they were both serving time in Arbour Hill prison.
Murphy (47), who served 10 years for rape and attempted murder, is now openly living in the Dutch city where he has a job with a logistics firm.
The Herald revealed yesterday that he spends most of his free time with the man, who even brings him to and from work everyday.
As part of a special investigation involving reporter Paul Williams, they were also photographed leaving for a fishing trip together.
Murphy's pal held the women hostage in an apartment and attacked them with a knife.
He then took turns raping both of them, but was arrested soon after by uniformed gardai from Tallaght station.
Like Murphy, the Dublin man pleaded guilty to his crimes -- but offered no explanation for his savage act.
Sources say that Murphy's pal is "a total brute".
"He carried out a horrific attack on those two women. And like Murphy he had not come to garda attention before that event."
Murphy, nicknamed the Beast Of Baltinglass, remains the chief suspect for the disappearances of Annie McCarrick, Jo Jo Dullard and Deirdre Jacob. However he is now leading a low-key life in Amsterdam where nobody is aware of his sordid past.
He avoids contact with local people where he lives, most of whom are either working-class Dutch or immigrants from outside Europe.
It is understood that Murphy's pal is on the sex offenders' register, which had come into existence six months before his conviction in the Dublin Central Criminal Court in October 2002.
The double rapist, who was released in 2008, kept in touch with Murphy who was himself released in August 2010.
But it wasn't discovered that the two men are now effectively living together until Murphy was tracked down to Amsterdam.
It is understood that Murphy assisted his friend in obtaining a job at the same logistics firm in May. The double rapist collects Murphy for work every morning at 4am on his scooter.
The chilling revelation that Murphy's closest friend is also a rapist will be a source of grave concern to police.
Sources in Holland have confirmed that the Amsterdam police "are aware" of the presence of the two men in the city.
A security source described the revelation as "very disturbing".
"If the only company Larry Murphy keeps is also a violent sex offender then it is hard to see how either of them has reformed.
"They should be kept under very close supervision."