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ZEMO ALVANI, Georgia (Reuters) - Residents of a mountainous village in the former Soviet republic of Georgia reinstated a monument to dictator Josef Stalin on Friday to mark the 133rd birthday anniversary of their famous compatriot.

Some 30 residents of the village of Zemo Alvani, 200 kilometres (124 miles) north-east of the capital Tbilisi, gathered to witness the unveiling of the three-metre-high stone statue of Stalin.

The statue was removed a year ago by local authorities after President Mikheil Saakashvili said the late dictator was too closely associated with what he called the "Soviet occupation of Georgia" and called for memorials to Stalin to be dismantled.

"I came here because I love Stalin and I love my people ... I remember when I was 12 how my grandmother was weeping when Stalin died," said Phatima Patishvili, a Zemo Alvani resident.

The monument's reinstatement is a sign that Stalin's personality cult is still alive across the former Soviet Union where supporters credit him with the Soviet victory over Nazi Germany during World War Two and with turning the country into a superpower.

However, for many Georgians, including for pro-Western President Saakashvili, the few remaining monuments to Stalin are an unwelcome reminder of Moscow's lingering influence in Georgia two decades after the small nation gained independence following the 1991 collapse of the Soviet Union.

Resentment of Russia flared in Georgia when the two fought a brief war in August 2008.

Saakashvili and others also believe it is wrong to still venerate a man who oversaw the purges, the Gulag prison camp system and man-made famines that killed millions.

Georgia's former government, then led by Saakashvili allies, removed another Stalin monument in 2010 - a 6-metre-high bronze statue in the dictator's native town of Gori.

The authorities were planning to replace it with a monument to victims of Stalin's purges and to those of the 2008 five-day war, but the project was never implemented.

Georgia's new government of billionaire Bidzina Ivanishvili wants to improve ties with Russia. It said it did not oppose the reinstatement of the Stalin monument in Zemo Alvani.

It also said it would finance the restoration of the Stalin monument in Gori, the Georgian city most affected by the 2008 war that saw Moscow recognise the two breakaway regions of Abkhazia and South Ossetia as independent states.

Russian President Vladimir Putin said on Thursday that Russia would not reverse its decision.

A coalition led by Ivanishvili, who made his fortune in Russia, won Georgia's October 1 parliamentary election ending a long period of political domination by Saakashvili, who first rose to power as leader of the 2003 "rose" revolution.

(Writing by Margarita Antidze; Editing by Gabriela Baczynska and Andrew Osborn)