England had said on Tuesday that they would not play a Test in the violence-prone city, but agreed to play a One-day International there and will decide in 10 days' time whether to play a second game as well.
"Until and unless the law and order situation is restored such things will happen," Khan, a former Pakistan captain who is now a politician in his homeland, said on Wednesday.
"When England's security team was in Karachi the city mayor was quoted in newspaper as saying that local elections next months will see bloodshed and everyone took notice of it," said Khan.
"You can't blame the Pakistan Cricket Board (PCB) because in such a situation if they press for a Test in Karachi the whole tour might get jeopardised."
However cricket officials in Karachi vowed to protest the decision and hit out at the PCB for failing to argue the case for the country's largest city.
"England's refusal to play a Test in Karachi is disappointing and we would protest over it," Karachi City Cricket Association (KCCA) secretary Sirajul Islam Bukhari said.
"The PCB has failed to plead the case of Karachi," Bukhari added.
"Karachi is a safe place and in a population of 15 million one or two incidents are common. Colombo in Sri Lanka staged international matches when there was unrest, so why not Karachi?"
Bukhari said Karachi staged the 1996 World Cup successfully even though there was a curfew in some parts of the city.
The three Tests proposed for the tour are now likely to take place in Lahore, Faisalabad and Multan while Lahore will also stage two One-day Internationals.
If England plays only one Limited Overs match in Karachi, then Rawalpindi will stage two.
Two British security experts spent last week assessing security at various grounds in Pakistan, and two senior English cricket officials visited this week.
Karachi has been rocked by a series of deadly shootings as well as a suicide bombing at a mosque and the burning down of a KFC restaurant earlier this year.
In the aftermath of the September 11 attacks, foreign cricket teams like Australia and the West Indies have refused to play in Pakistan because of security fears.
Karachi has been rejected as a Test venue by South Africa and India since a bomb blast outside the New Zealand's team hotel in May 2002 killed 14 people including 11 French naval engineers.