The Government has rebuffed calls to impose a fee on commercial broadcasters to save the soon-to-be-defunct TVNZ7.

New Zealand's only commercial-free, public service television station will close down this month after the Government decided not to extend its $79 million funding over six years, $70m of which came from a special dividend from Television New Zealand.

TVNZ7 will become a TV One Plus One channel.

Lobby group Save TVNZ7 said a levy on commercial broadcasters would enable the Government to retain the free-to-air channel without having to contribute any new money.

"It should have been considered at the beginning of 2011 when the Government was casting around looking for fiscally neutral ways to do it.

"If they were genuinely looking at a way to keep TVNZ7 funded, that would have been the obvious way because it wouldn't have cost the taxpayer a thing."

Victoria University's senior media studies lecturer, Peter Thompson, says a 1 per cent levy on Sky and telecommunications companies could generate $60m a year for the Government.

Money raised from the levy could also increase New Zealand On Air's platinum fund for local content and give additional funding to Radio New Zealand or Maori Television.

Similar systems had been adopted in Spain and France.

"It would solve a lot of the immediate problems around the lack of money for public broadcasting," he said.

TVNZ has estimated it could cost $16m a year to continue funding TVNZ7.

Commercial broadcasters could recuperate the levy through a small increase in subscription rates.

However, Broadcasting Minister Craig Foss said the Government would not consider a levy.

"The Government is satisfied with the current contestable funding model through NZ On Air to support public broadcasting in New Zealand."

Sky Television spokeswoman Kirsty Way said the commercial broadcaster would not support a levy. Sky showed a large amount of local content and invested significantly in local productions; its sport budget alone was $80m last year.

"We are investing without the need for any sort of fee to be charged."

Meanwhile, Sky has confirmed it is in preliminary talks with TVNZ about the Back Benches programme moving from TVNZ7 to Prime.

"But we've got a fair way to go to finalise anything at this stage," Ms Way said.

Prime was attracted to the show because it was locally produced.

"It really brings politics to a younger audience and makes it really accessible for that age group."

Save TVNZ7 had hired high-profile constitutional lawyer Mai Chen to examine whether the Government has acted lawfully in its decision to axe funding for the free-to-air channel.

Ms Chen is expected to decide by the end of the month whether the lobby group has a case to seek a judicial review.