* Russia restricted protests in Sochi to on area
* Only two protests have been held there
* Putin wants Games to show modern face of Russia
By Timothy Heritage
SOCHI, Russia, Feb 15 (Reuters) - When Russian President Vladimir Putin ordered the creation of a special protest area at the Winter Olympics, it looked like a victory for freedom of speech.
A week into the Games his decision to ease the blanket ban on protests in Sochi, presented as a liberal concession to critics, has done little or nothing to lift the lid on dissent during the Games.
The "Speakers' Corner" is tucked away in a small, scruffy park overlooked by a noisy highway in the Sochi suburb of Khosta, 20 minutes by train from the nearest Olympic venue and out of sight for athletes, foreign dignitaries and fans.
There have been small protests by gay rights activists elsewhere in Russia during the Games, but only two sparsely attended meetings this month in the protest area itself.
One drew attention to the plight of Russians born in World War Two, the other supported Putin.
It is not exactly the stuff revolutions are made of, and the people of Khosta hardly even noticed.
"Protests? Here? Are you sure?" said Lyuba Kuznetsova, a woman walking her dog through the park on a sunny February morning. "What's there to protest about?"
The lack of protests at the Games at first seems surprising after months of controversy over a Russian law banning the spread of homosexual propaganda among people under 18, which prompted gay activists to call for a boycott.
It seems less surprising to anyone who visits Khosta or tries to get permission to hold a rally in the Black Sea resort.
Russia initially banned protests entirely during the Olympics as part of security measures and efforts to ensure the Games, on which Putin has staked his political reputation, portray the country in the best possible light.
After months of pressure over the "gay propaganda" law, Putin amended a decree to allow some protests to be held in Sochi, though only in the designated protest area.
The move meant the Russian authorities could respond to any accusations that it was stifling dissent, but drastically reduced the protests' potential impact by ensuring they were far away from the action on the snow and ice.
The Sochi city authorities also put in place rigorous bureaucracy that would put off many would-be protesters.
Applications to stage a rally must be filed in writing at least 10 days in advance. Applications for a picket, a smaller meeting, can be filed three days beforehand. Any application filled out incorrectly is rejected.
Defending the decision to put the protest area in Khosta, a spokesman for Sochi city authorities said it was "very convenient in terms of transport" with a rail link to the sports venues and trains every 15 minutes.
The one protest application rejected so far was filed by Environmental Watch on the North Caucasus, a group that campaigns against ecological damage it blames on Olympic construction work.
A court this week upheld a three-year prison sentence against one of its activists, Yevgeny Vitishko, on charges - which he denies - of damaging property owned by the regional pro-Putin governor.
Vladimir Kimayev, another member of the group, said the rejection of the application underlined the gap between what Putin and former President Dmitry Medvedev say in public and how opposition groups are dealt with on the ground.
"Both Putin and Medvedev during their presidencies urged us to hold a constant dialogue (with the authorities) ... but in reality there has been no dialogue," he said.
WHAT COMES AFTER THE GAMES?
Opposition activists in Moscow have had similar experiences. Although some protests are allowed, the venue has to be approved by the authorities in advance and attendance is capped.
Police detained gay rights activists who tried to protest in Moscow and St Petersburg on Feb. 7, the day the Games opened. About 30 people with the gay pride flag protested in Moscow on Saturday against homophobia and political repression.
Putin's decision in January to ease the curb on protests in Sochi was one in a series of moves intended to disarm Russia's critics before the Olympics.
Others included a pardon for former oil executive Mikhail Khodorkovsky, jailed on fraud and tax evasion charges after falling out with Putin, and an amnesty for prisoners including two members of the female protest movement Pussy Riot.
His opponents say such moves are cosmetic.
"The concern is what will happen to civil society after the closure of the Olympics, after the international focus moves away," said Denis Krivosheev, deputy director of Amnesty International's Europe and Central Asia programmes.
A reporter asked Putin at the Games on Saturday whether signs of liberalisation would continue after the Olympics.
He replied testily: "Is there any hope you will not link sports with politics?" Then he walked away. (Editing by Robert Woodward)