Its sweeping multicolour panorama set off against a grey ravine of prefab high-rises in the background and rows of beige Trabants parked in front, Josep Renau’s mural in Moscow Square in Erfurt used to have a mission to turn heads and inspire.

Made of 70,000 glass mosaic tiles, the Spanish artist’s work shows two gigantic hands, one clutching a sliced apple, the other what looks like a Salvador Dalí rendering of a jellied Rubik’s cube. Its title, in the utopian jargon still favoured in socialist East Germany when the mural was conceived in 1976: Man’s Relation to Nature and Technology.

When the culture centre that lent the artwork its facade went bankrupt after the end of the cold war, the mural was disassembled and packed away into storage. But as of this week, Renau’s work is back in all its pixelated glory, with 500 replacement tiles made of artisanal Italian glass being fixed to a concrete structure that sets it apart from what is now a shopping centre.

Renau’s mosaic in situ before the culture centre closed down. Photograph: Erfurt city archive

Completed just in time for the 30th anniversary of the fall of the Berlin Wall, the fact that the majority of the €800,000 (£690,000) restoration costs were shouldered by a western German building association marks a significant moment in the long and embittered battle over the status of the East’s cultural heritage in a reunified Germany.

Many of the most feted painters in West Germany, such as Gerhard Richter or Sigmar Polke, had been émigrés from the socialist East, engendering the widely shared belief that those artists who had stayed on the other side of the wall must have been slavishly loyal to the single-party state. Georg Baselitz, who left Saxony for West Berlin in 1958, memorably described his eastern counterparts as “assholes” when the iron curtain came down.

Each previous anniversary of the collapse of the German Democratic Republic (GDR) has been marked by ill-tempered debates about the inclusion or lack of East German artists in the reunified country’s galleries. The Bilderstreit (“picture quarrel”) started in 1999 over an exhibition in Weimar, which seemed to symbolically equate the artists of the East with those working under the patronage of the Nazi regime.

Ten years later, Angela Merkel opened a state-sponsored exhibition called Sixty Years, Sixty Works that was entirely void of works by artists from the part of the country where the chancellor grew up.

An artist works on restoring the tiles. Photograph: Thomas Wolf/Wüstenrot Foundation

Many of the murals that adorned civic buildings in East Germany have been actively discarded or allowed to fall into disrepair. In Potsdam, on the south-western edge of Berlin, Fritz Eisel’s 1972 Man Conquers Space mural on the old data-processing centre might have to make way for the rebuilding of the Prussian-era garrison church.

The battle over the ideological supremacy of the two political systems, wrote the art historian Eduard Beaucamp in 2013, had been “nowhere more fundamental and embittered as in the visual arts”.

The return of the Erfurt mural, however, speaks of a new pragmatism in the treatment of artworks from the East German regime. Philip Kurz, the director of the Wüstenrot Foundation, which paid the bulk of the restoration costs, said he had been “hooked” on the mosaic since he first saw pictures of it.

“There is this incredibly joyous use of colour, and a very exciting making-of story, with the artist spending a lot of time trying to work out how people would interact with the picture from different angles and different distances,” he said.

The ‘ghost train’ mural on the town hall of Plauen, Saxony, is in line for full restoration from 2021. Photograph: Philip Kurz

The project was helped by the fact that Renau – a committed communist who had first fled Franco’s Spain to Mexico, where he worked with Diego Rivera and David Alfaro Siqueiros – rubbed up against the top-down bureaucracy of the Socialist Unity party’s ruling cadre after arriving in East Germany in 1958.

“I don’t paint for the central committee,” said the Valencia-born artist in 1980, two years before his death in East Berlin. “I paint for people who are not interested in paintings. Art has to come to the people unannounced, into every home.”

Apart from the fusion of the male and female symbol in the centre of the curved mosaic – a possible reference to the GDR having tried to enshrine gender equality in its 1949 constitution – the artwork lacks overtly political iconography.

Yet Kurz said his foundation could in the future also set its sights on restoring murals that included a hammer and sickle instead of just a compass. “In 2019, this should not be a scandal any more,” he said. “Every artwork is a product of its time.”

A new €1.5m programme by the foundation will specialise in restoring East German public works of art, of which it estimates only 60% survive. The psychedelic “ghost train” mural on the town hall of Plauen in Saxony, by Karl-Heinz Adler and Friedrich Kracht, will be the next project, starting in 2021.

“We want this to be the start of a new wave of people caring about this kind of art,” Kurz said.