He was responding to a question on the government's stand on GM crops at an economic summit organised by the Ceylon Chamber of Commerce on reviving the island economy after the end of the 30-year ethnic war.
"GM food is being consumed by everyone although officially it is not allowed in Sri Lanka," Nanayakkara said.
There were imports of GM food although they were not labelled as such, he said.
"In the United Kingdom, under the law GM food should be labelled but here in Sri Lanka we do not officially permit it but unofficially it has got into the market.
"My personal opinion is that GM food should be allowed after careful study," Nanayakkara said.
"If we can find a crop which through genetic engineering is made resistant to pests, it's good.
"With certain limits I think GM will finally have to come - it is most developed stage in agriculture today."
He noted that some countries allow GM not for foods but for crops such as cotton to make clothes.
GM crops are genetically modified to improve resistance to disease, pests or drought and improve yields, but there is a growing debate about potential harmful impacts on humans and animals.
Countries like China have eargerly embraced GM technology.
But older and less precise methods of gene modification such as hit-or-miss bombardment by radiation to alter genes are less tightly regulated and do not require labelling in most regulatory regimes.
Almost all food crops and domestic animals have been genetically modified by humans from their original wild state by different techniques.
Sri Lanka introduced rules to ban GM food imports some years ago but later relaxed them after protests from importers.
Nanayakkara said the government was still studying the issue and ministry officials had recently held talks with an American GM specialist.
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