"We are going to proceed and study on the process and procedure that is needed for the disbanding," said Lo Kin-hei, chairman of Hong Kong's Democratic Party.
Lo said the final decision to dissolve the party must be left to a members' vote, without saying when that will take place.
"We considered the overall political environment in Hong Kong and all those future plans that we can foresee, and that is the decision that we make," Lo told reporters.
The Democratic Party was founded in 1994, near the end of British colonial rule, when Hong Kong's leading liberal groups merged.
Early leaders of the Democratic Party played a key role in shaping "One Country, Two Systems", a constitutional arrangement that promised Hong Kong a high degree of autonomy and rights protections.
After the city was handed over to China in 1997, the party became the most influential voice of opposition in Hong Kong's legislature and led peaceful street demonstrations.
But the party's fortunes declined after Beijing tightened its grip and imposed a national security law in Hong Kong, following huge and often violent pro-democracy protests in 2019.
"Developing democracy in Hong Kong is always difficult," Lo said Thursday.
In recent years "we see a lot of civil society groups or political parties disbanding", he added.
Asked whether the democrats were pressured by Beijing to fold, Lo said he would not disclose details of internal discussions.
Four of the party's ex-lawmakers -- including former party leader Wu Chi-wai -- are serving prison sentences after being found guilty of subversion under the national security law last year.
The party no longer holds any legislature seats after Hong Kong revamped its electoral system in 2021 to ensure only "patriots" can take office.
A three-person team that includes Lo will look into the legal and accounting rules on party dissolution, as the start of a multi-step process.
The group currently has 400 members and is not experiencing acute financial stress, according to Lo.
A vote to dissolve the party will require the support of 75 percent of meeting participants.
Lo said he hoped Hong Kong can return to values such as "diversity, inclusion and democracy" that underpin its past success.
Well-known figures from the party include Martin Lee -- hailed by some as Hong Kong's "Father of Democracy" -- as well as Albert Ho, who organised annual vigils to mark the 1989 Tiananmen Square crackdown.
Western nations including the United States have criticised Hong Kong for curtailing rights, but city officials say the security laws are needed to restore order.
Hong Kong's second-largest opposition group, the Civic Party, dissolved in 2023.
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