A Beijing-friendly heavyweight warned failure to achieve universal suffrage in 2017 would be the "worst scenario" for all sides.
He said Beijing would pay a heavy price if a popular pan-democrat were barred from the chief executive race.
Legislative Council president Jasper Tsang Yok-sing said he did not think the central government labelled local pan-democrats as "confrontational", but rather, the door was still open for them to win the top job when universal suffrage was introduced.
This was regarded as putting a positive spin on the National People's Congress Law Committee chairman Qiao Xiaoyang's remarks in March that the city's chief executive must not be confrontational towards the central government.
In March, Qiao told Beijing-loyalist lawmakers at a meeting that "as long as [the opposition camp] insist on confronting the central government, they cannot become the chief executive … One day, when they give up going against the central government, return to the stance of 'loving the nation, loving Hong Kong', and prove by their actions they will not harm the interests of the country and Hong Kong, the door is open for them".
The top NPC official's remarks were seen as labelling pan-democrats as confrontational, but Tsang said he saw it the opposite way. "Qiao's remarks were pragmatic - he was saying those who don't love China and Hong Kong cannot become the city's leader … he did not say 'you are pan-democrats, you don't love the nation and Hong Kong, and you cannot run'."
Article 45 of the Basic Law calls for a "broadly representative" nominating committee to propose chief executive candidates for election "in accordance with democratic procedures".
Pan-democrats saw Qiao's comment as the clearest hint yet that a screening mechanism would be set up to bar candidates not acceptable to Beijing from running in the 2017 election.
But Tsang believed that a screening was unlikely. "If they do so, the central government could pay a heavy price, and hamstring the local administration," he warned.
"I think most Hongkongers are pragmatic … if [a pan-democrat] decides to run, shows he is willing to work with the central government, and gives no cause for critics to accuse him for being not patriotic … Hongkongers may ask 'why should we rule him out?' I don't think the nominating committee and Beijing's standards can be much different from those of the people."
Dismissing sceptics who wondered if the city might be better off without democratic progress, Tsang warned that failure to achieve universal suffrage would be "the worst scenario" for all. "If it messes up … the next chief executive will face more difficulties than Leung did last year, because Hong Kong people will be unhappy," Tsang said.
"Beijing [has long promised] there will be universal suffrage in 2017, and if there is none … how can the people believe that we will have it five years later?"
Tsang emphasised that negotiation was possible between Beijing and local pan-democrats, but it would require pragmatism and tolerance on both sides.
"If [pan-democrats] look at what they called 'the Communist Chinese regime' as rivals against democracy, negotiation will be impossible," Tsang said. "Similarly, if Beijing is biased and sees local pan-democrats as foes which must be suppressed, how can talks be possible?"