This really is a tough question indeed. I cannot think of something that would adequately keep the neighbour's cat out and would not interfere with your cat in the process.
I know cats do not like pepper. I have known people to put some pepper on their porch to keep cats away. Putting pepper near the fence would not be a good idea because it would also affect your cat. In fact, I am not so sure I am in favour of this method.
Building a cage like structure in your garden seems like a lot of trouble to go through. I was wondering if that would be worth the trouble because what would you do when your cat does not like it?
Keeping your cat indoors is not always an option either because why should you keep your cat indoors when the cats next door are the aggressive ones? Secondly not everybody is able to keep a cat indoors because of various reasons. Is there enough room? Does a familymember suffer from cat allergy?
When your neighbours persists to be unresponsive, maybe you should consider reporting to the RSPCA?
