Democratic Party chairman Martin Lee Chu-ming, who will stand down at the end of the year, has appealed to members to give their full support to the new leader.
He also said it would be good if there was a leadership contest.
'Whoever wins, I hope everyone will support him or her. When the new leader comes to office, he or she will be under a lot of pressure. There might be resignations from members. But a sense of crisis may be turned into a positive element for change.'
Mr Lee, who has twice been elected chairman of the party formed in 1994, is due to step down this year as required by the party constitution.
Analysts say the change of leadership may further destabilise a party already suffering from a fall in popularity. A University of Hong Kong poll has found the party ranked sixth out of 10 in popularity.
Chief Executive Tung Chee-hwa is considering a landmark move to share power with leaders of at least two main political parties in his new cabinet. Should the Government align with the Democratic Alliance for the Betterment of Hong Kong and the Liberal Party under the ministerial system being introduced in July, Mr Lee admitted the Democrats would be at even more of a disadvantage in putting forward their policies.
'We had a brief honeymoon period in 1995 when democrats for the first time gained a majority in the Legislative Council,' he said. 'A number of private members' bills were passed before the handover.