* Putin says Sochi Games should help thaw ties with Georgia
* Is prepared to meet Georgian president
* Says Russia still faces Western "containment" efforts
By Alexei Anishchuk
SOCHI, Russia, Feb 10 (Reuters) - President Vladimir Putin held out the prospect of better relations to Russia's 2008 war foe Georgia on Monday but had tougher words for the West, saying criticism of the Sochi Olympics was part of a Cold War-style "containment" effort.
Putin used a televised meeting in Sochi to court Georgia, which is trying to balance pro-Western policies with a cautious warming toward Moscow, and to dismiss Western criticism of the Olympics as a doomed attempt to hold his country back.
"The Olympics are playing a positive role" in relations between the two ex-Soviet republics, Putin said, emphasising that he believes flights set up between Sochi and the Georgian capital Tbilisi should continue after the Games.
He held out a prospect of the first face-to-face talks with Georgia's president since the five-day war in 2008, saying: "If he wants to, why not?"
Georgia had considered boycotting the Games but ended up sending athletes and members of its national Olympic Committee, part of a tentative thaw since pro-Western former president Mikheil Saakashvili's party lost control of parliament in 2012.
Moscow blamed U.S. ally Saakashvili for the war and recognised the breakaway regions of South Ossetia and Abkhazia as independent states after the conflict.
Ties remain tense. Georgia fumed when Russia, citing Olympic security concerns, last month shifted its border posts 11 km (7 miles) deeper into Abkhazia, whose borders lie just a few kilometres from the main site of the competition.
TIPTOEING TOWARD MEETING
But Georgian President Georgy Margvelashvili indicated he might meet Putin, saying his administration would "analyse the Russian president's comment very seriously" and hold consultations within Georgia and with Western states.
"If such a meeting gives a positive impulse to Georgian-Russia relations, if there is a serious readiness to discuss very problematic issues, I will discuss this issue with our colleagues," he told reporters.
Georgia's strategic location and role as a transit state for energy to Europe make it a subject of competition between Russia and the West.
The war followed increasing tension over Saakashvili's efforts to bring his country into NATO, which Moscow strongly opposed. Putin suggested on Monday that criticism of the Sochi Olympics, upon which he has staked his reputation, was rooted in geopolitical competition.
"Back in Cold War times the theory of containment was created. This theory and its practice were aimed at restraining the development of the Soviet Union ... what we see now are echoes of this containment theory," Putin said, adding: "This, unfortunately, has also applied to the Olympic project."
Putin said one "instrument" being used against Russia by the West was criticism from some Muslim ethnic Circassians who say the Games are being held atop the bones of ancestors who died en masse when they were expelled from the Russian Empire in the mid-19th century.
"I know the mood among Circassians," he said, dismissing such criticism as misguided. "When I saw that such efforts were being made ... it was obvious to me that they had no prospects."
During Saakashvili's presidency, Georgia's parliament recognised the mass deaths of Circassians as genocide. (Additional reporting by Margarita Antidze in Tbilisi and Gabriela Baczynska in Moscow; Writing by Steve Gutterman; Editing by Robin Pomeroy)