[Shamol Majumder]

There is no need to re-encode the video, just demux with Streamclip using the option “Demux to Unscaled M2V and AIFF…”, that’s made for FCP. You will only have to render in the timeline what you use, not the complete video.

MPEG Streamclip User’s Guide:

Demux to Unscaled M2V and AIFF…
demuxes the stream and creates an “unscaled” M2V video file and an AIFF audio file; you can import these two files in Final Cut Pro 4 or HD (and also in Final Cut Express if you have the MPEG-2 component); usual rendering time is required. Please DO NOT use drag & drop to import the files (Final Cut may crash due to an internal bug), but open the M2V file using the File menu and the AIFF file will be automatically linked (if you used the same name for the two files).
The “unscaled” M2V file is a demuxed file which tells QuickTime and Final Cut to not prescale it, e.g. to 720 x 540; it preserves its original size e.g. 720 x 576 or 720 x 480 so you won’t lose quality when you render it. This is a special feature of MPEG Streamclip.

Shamol Majumder
Editor/Colorist
Twitter