"Because of lack of response from Chinese we have to be realistic, there is no hope", Tenzin Taklha told Reuters.
"His Holiness does not want to become a hindrance to the Tibetan issue, and therefore has sent a letter to the parliament regarding what options he has".
The Tibetan spiritual leader has called for a special meeting of Tibetan exiles in the second week of November to discuss the future of the Tibetan movement.
His candour is seen as a vindication for the many exiled Tibetans who say his conciliatory "middle way" approach to seeking greater autonomy has not worked.
"I think the statement by his Holiness is an eye opener for the Tibetan people", Tsewang Rigzin, the president of the pro-independence Tibetan Youth Congress told Reuters.
"We are not against the middle way approach of his Holiness, the fact is that China is not sincere and has never been sincere in talking about the middle way".
Taklha denied speculation that the 73-year-old Dalai Lama was going into retirement.
Karma Cheophel, the speaker for the Tibetan government-in-exile, earlier said the Dalai Lama had "hinted he is now on full retirement", sparking some rumours in the local media.
The Dalai Lama gave his first public address on Saturday since undergoing gallstone surgery, in the northern Indian hill town of Dharamsala, the seat of the exiled government.
Beijing vilifies the Dalai Lama as a traitor and earlier this year accused him of orchestrating a deadly wave of unrest in Tibet ahead of the Beijing Olympics.
Taklha said he hoped the eighth round of talks between Tibetan envoys and Chinese officials will be held by the end of October.
The two sides have met to try to ease tension in Tibet since violent riots broke out there in March.
Many Tibetans, especially younger generations, see the talks as a Chinese ploy to delay progress on the question of either independence or regional autonomy for Tibet.
The Dalai Lama has lived in exile in India since fleeing a failed uprising against Chinese rule in 1959.