"It is too obsessed with its own self-imagined 'stars' and the culture surrounding them than to have any credible claim on being a legitimate national broadcaster.
"By contrast, TVNZ7 has always appealed to a higher standard - both in terms of quality and the range of programmes offered.
"To replace TVNZ7 with the rubbish of TV One is a disgusting insult to the hundreds of thousands of regular TVNZ7 viewers."
Mr Dunne called for TVNZ's newly appointed chairman Wayne Walden to intervene immediately to stop the repeats channel going ahead.
He said Mr Walden has a strong reputation from his time as chair of Maori Television.
"I hope he will bring those same qualities to his new role at TVNZ and play an active part in restoring TVNZ as a quality public service broadcaster.
"Reversing this insulting decision would be a good start."
In a statement, TVNZ said changing viewer habit have seen "time-shifted channels" established internationally.
"Long working hours, shift work and traffic problems have had an impact on the numbers able to watch the evening news in its traditional time slot, and there is now an identifiable global trend towards time-shifting by consumers," the statement said.
TVNZ acting chief executive, Rodney Parker, said the "plus one" channel meets the broadcaster's strategy of reaching more New Zealanders.
"TV ONE has been selected as the time-shifted channel to maximise exposure for the great local content, news and current affairs that it features," Mr Parker said.
"Having already established a number of new channels over the past few years, including Channel U, Heartland and Kidzone24 the decision to broadcast a free to air 'plus one'
channel was only made once we looked carefully at what other options might be commercially viable".
"We believe that this is a desirable and appropriate use of the frequency that offers an additional opportunity for viewers, particularly those without PVRs, to fit their individual circumstances.
The new channel will begin broadcasting at 7am on July 1.
It will be offered on Freeview, but may be available on other platforms in the future.
