On their behalf victim advocate group Family First has written a letter to the Solicitor General and Justice Minister Amy Adams requesting a review of the bail decision.
The man, in his 70s, has name suppression. That was granted because he lives next door to the victim, who has automatic and permanent name secrecy due to the sexual nature of the charges.
Family First spokesman Bob McCoskrie said the bail decision was "unacceptable".
"A decision like this simply re-victimises the child, is hugely traumatic for the family trying to recover from the offences committed previously, and sends a message to the community that the rights of offenders are greater than the rights of victims," he said in the letter, sent this afternoon.
"For this horrific child abuse, the offender receives a punishment of celebrating Christmas at home, while the abuse will impact the child for the rest of her life."
Mr McCoskrie said Judge Johns did not place enough weight on the victim's rights as outlined in the Ministry of Justice guidelines on bail.
He said in her "idiotic" decision Judge Johns "failed to give the protection of the victim its due primary importance".
"Based on this decision, it appears that the justice system in New Zealand simply doesn't value the welfare and protection of our vulnerable young children," Mr McCoskrie wrote.
"Put simply, it appears to be an idiotic decision - and our view is shared by many New Zealanders. We would therefore ask for an immediate review of this bail decision."
The Herald has sought comment from the Crown Law Office and Mrs Adams on the letter.