By James Pomfret and Clare Baldwin
HONG KONG, Oct 21 (Reuters) - Thousands of Hong Kong protesters listened raptly from the streets on Tuesday as student leaders debated their call for full democracy for the Chinese-run city with government leaders to try end a weeks-long occupation of major traffic arteries.
But, as had been widely expected, there was no breakthrough. Student leaders had yet to decide whether or not to hold a second round.
Beijing-backed city leader Leung Chun-ying had earlier hinted at a procedural concession in choosing the next leader, but it fell well short of what the student-led protesters have been demanding.
Three large screens and projectors were set up at the tent-strewn main protest site on a thoroughfare in the Admiralty district, next to the government offices, with periodic cheering for remarks by student leaders and jeering when Chief Secretary Carrie Lam spoke during the dialog.
"(Officials) in the Hong Kong government can now decide whether to be democratic heroes or historical villains ... I believe every Hong Kong citizen is waiting to see," student leader Alex Chow said.
Hong Kong returned from British to Chinese rule in 1997 under a "one country, two systems" formula that allows it wide-ranging autonomy and freedoms and specifies universal suffrage as an ultimate goal. But Beijing is wary about copycat demands for reform on the mainland eroding one-party rule.
Communist Party rulers in Beijing in August offered Hong Kong people the chance to vote for their own leader in 2017, but said only two to three candidates could run after getting majority backing from a 1,200-person nominating committee, which is widely expected to be stacked with Beijing loyalists.
The protesters decry this as "fake" Chinese-style democracy and say they won't leave the streets unless Beijing allows open nominations.
"We hope the Hong Kong government doesn't become an obstacle on the democratic road for Hong Kong people," Chow added. "But that it will help us dismantle these road blocks and to lead Hong Kong people to bring about true democratic reform."
Lam reiterated the government's position that open nominations were not possible under Hong Kong law.
"The students' voices and demands have been clearly heard by the special administrative region government, Hong Kong society and the central government," said Lam, seated on one side of a U-shaped table with four colleagues facing an equal number student leaders wearing black t-shirts.
"But no matter how high the ideals, they must be strived for through legal, appropriate and rational means."
The unprecedented open debate on democracy, that put protesters on an equal footing with Hong Kong officials who have branded their acts illegal, reflected a shift in the government's approach to engage rather than shun a movement that has lasted beyond most people's expectations.
"ROOM FOR DISCUSSION"
The officials said they would send a report to Beijing on the situation in Hong Kong and the protesters' demands.
China's state broadcaster showed the talks live, but only the government officials, not the students.
After the meeting, the students said they had yet to decide whether to hold further talks. Chow described the few gestures offered, including the situation report to Beijing, as the government having merely "tossed a few hollow and illusory" concessions.
The panel chosen to pick candidates for Hong Kong's 2017 election could be made "more democratic," Leung said before the talks began, the first indication of a possible concession.
"There's room for discussion there," he told reporters. "There's room to make the nominating committee more democratic."
After more than three weeks of demonstrations that have snarled traffic, and mostly tough talk from Leung and other officials, expectations had been low for any real progress in the talks.
"The government officials behaved like a walking recorder, repeating speeches that they had prepared," said sales assistant Gladys Lee. "They didn't respond to any of the students questions, but said what they had prepared."
The protests have sparked occasional scuffles between demonstrators and the police, who once fired tear gas on the crowd and have also used pepper spray and batons, but have not attempted to fully clear the streets.
Leung told reporters, however, that such action "could take place whenever the police see it as necessary. It is their duty to maintain law and order in Hong Kong.
"We are not tying the dialog with the students to police actions ... we have never said that while dialogs go on - and there will probably be several rounds of dialog with the students - the police will not carry out necessary actions."
Leung, who did not take part in the talks with students, declined to say if there was a deadline for clearing the protesters.
In blunt remarks on Monday, Leung told reporters that free elections were unacceptable partly because they risked giving Hong Kong's poor and working class a dominant voice.
"If it's entirely a numbers game and numeric representation, then obviously you would be talking to half of the people in Hong Kong who earn less than US$1,800 a month," Leung said.
"Then you would end up with that kind of politics and policies," added Leung, warning of the dangers of populism and insisting that the electoral system needed to protect minority groups.
Critics say the political system already favors the rich in Hong Kong, which has one of the biggest wealth gaps in Asia and where the vast majority of people cannot afford their own home. (Additional reporting by Clare Jim, Farah Master and Yimou Lee; Writing by John Ruwitch; Editing by Nick Macfie)