The Legislative Council Commission is expected to reach a decision this month. 'Kenneth Chen is quite likely' to win the job, the source said. 'He did very well in the interview, though he has no experience working in Legco.'

As to Lam's chances, the source said she had the edge in interpersonal relationships and networking in Legco after working there for years.

If he is accepted, Chen would take a pay cut of as much as 10 per cent, giving rise to concern that his move might suggest the quasi-ministerial system adopted since 2002 has failed to retain political talent.

Legco president Tsang Yok-sing, however, said yesterday such a move should be welcomed.

Tsang would not confirm or deny whether Chen had applied for the job but said the selection process had entered the final stage and a decision would be made this month.

'We have already got someone in mind as the most suitable candidate,' he said.

'We hope we can make a decision this month so as to allow the successful candidate sufficient time to prepare to be able to take up the job by the end of August at the latest.'

Tsang also said: 'We should be very glad to see [a political appointee take a lower-paid job after leaving the government] if we hope for Hong Kong's political system to become more mature.

'In the past, the government also drew some talent from the private sector to serve in the government. Their pay in the government was lower than what they got in the private sector.

'But we would not say that Hong Kong's business system was a failure.'

An undersecretary is paid HK$200,000 to HK$220,000 a month, while the monthly pay for the Legco secretary general is HK$187,100.

Democrat Cheung Man-kwong said that as undersecretary, Chen had maintained good working relations with various political parties, but he said he was unsure about Chen's administrative skills.

City University political scientist James Sung Lap-kung said Chen might not have the necessary political skills for the job.