An editorial director at Ming Pao said the newspaper's parent company was allowed to choose who it wanted at the helm of the Chinese daily broadsheet.
Cheung Kin-bor, himself a former chief editor, added he would respect the choice of the paper's bosses at Media Chinese International.
He was speaking after emerging from a four-hour meeting between company chief executive Francis Tiong Kiew Chiong and delegates from the staff concern group. Also present was outgoing chief editor Kevin Lau Chun-to, whose move to another post in the company had triggered the row between the journalists and their management.
"The power to appoint the chief editor is in the hands of the bosses. The responsibility is theirs. This is fair."
But he admitted he believed a Hongkonger would be best equipped for the job. He said that while Chong Tien Siong, former editor of the group's Malaysian paper Nanyang Siang Pau, was a very likely successor to Lau, the choice had not yet been finalised.
Sin Wan-kei of the staff concern group said its members had reached agreement with the media group that the new chief editor would safeguard freedom of speech and that staff would respect its right to make appointments. But management did not agree with them that the appointee should be trusted by staff and know the city well.
Both sides will meet again on Thursday.
Earlier, Lau asked Hongkongers to step back from its newsroom issues so that editorial staff and management could resolve their conflicts over his sudden replacement in a better atmosphere.
It was the first time Lau had made any public comment since Monday last week, when he first informed colleagues he was being moved to the company's electronic books and teaching materials division. Lau said then that he had no plans to leave the newspaper.
"A colleague asked me why I chose to stay … and there are three reasons. First, the company has treated me quite well since I joined Ming Pao 18 years ago; second, I would miss this great group of colleagues and believe I can offer a bit of support to them by staying here; and third, I really love the work of new media and hope to find a way forward for the newspaper industry," he wrote in the paper's Newsroom Notes column online and in print.
Lau - who was appointed the paper's chief editor in 2012 - said he would respect the appointment of a Southeast Asian journalist as editor-in-chief as the power of appointment lay with the owner.
"As an employee, my duty is to offer objective and professional opinions to the boss and senior management on the pros and cons of different personnel decisions," he said, adding that he would strive to maintain the stability of the newsroom during the transition period.
Ninety academics from 11 institutions yesterday issued a joint statement expressing deep concern about press freedom at Ming Pao and in Hong Kong.
Yuen Chan, lecturer at the Chinese University, said: "We do not see what is happening in Ming Pao today as an isolated incident … The Ming Pao incident is a warning bell that press freedom in Hong Kong is under threat."