I think that Fredo, while he would have been terrible, would have been the only logical choice, although even that would have caused strife because he was, well... Fredo.

If Michael had been killed, the Corleones would have been torn apart by civil war. If Fredo was chosen to be the Don via legitimate succession, Clemenza and/or Tessio would have probably broken off and started a war. If Clemenza was chosen, Tessio would have broken off, and Fredo probably would have been convinced into betrayal a la GFII; vice versa if Tessio was chosen, Clemenza would have probably resented it. It couldn't have been Rocco since he wasn't established. Neri wasn't around at that point.

It could have been Tom (even if adopted, Fredo might have deferred to him as his "older brother"), but that might still cause problems with Clemenza and/or Tessio (but perhaps not as they seemed to be willing to accept Tom as consiglieri), and would have made the Corleones the laughingstock of the families anyways since Tom wasn't Italian, much less Sicilian.

In short, without Michael the family would be destroyed in one way or another.