HONG KONG (AFP) - A pro-democracy group on Sunday vowed to take over Hong Kong's financial district after Beijing insisted on vetting candidates for the southern Chinese city's next leader through a nominating committee.

The group called Occupy Central with Love and Peace said Sunday's decision ended any hope of compromise between democracy activists and authorities in Beijing.

"We are very sorry to say that today all chances of dialogue have been exhausted and the occupation of Central (district) will definitely happen," the group said in an emailed statement, without specifying when.

The top committee of China's rubber stamp legislature decided earlier Sunday that the city's next chief executive will be elected by popular vote in 2017, but that candidates must each be backed by "more than half of all the members" of a "broadly representative nominating committee".

Pro-democracy activists say the move means Beijing will be able to ensure a sympathetic slate of candidates and exclude opponents.

Occupy leaders did not give a timeframe for when the takeover of the thriving financial hub's streets would take place, but said that a sit-in was now inevitable.

"This is the end of any dialogue. In the next few weeks, Occupy Central will start wave after wave of action," co-founder Benny Tai told a press conference.

"At a point, we will organise a full-scale act of occupying Central," he added.

Earlier in the week Mr Tai had suggested his group would begin with small acts of civil disobedience before launching more comprehensive direct action.

Public discontent in Hong Kong is at its highest for years over perceived interference by Beijing, with the election method for the chief executive a touchstone issue.