The Germans were relegated from Pool A last year, but started their campaign in the lower division as the favourites, and with a 100 per-cent record.
Britain twice held the lead in the game at Odense, initially going in front through Paul Adey. Germany were level just over four minutes later when Daniel Kreutzer scored with a soft goal past Stevie Lyle, who had previously been outstanding in his first two matches.
A powerplay goal from Nicky Chinn restored Britain's onegoal cushion, the netminder Robert Muller given no chance with a shot high into the roof from just inside the face-off circle.
Tino Boos then pulled Germany level, with Lyle again at fault, the winner coming from Josef Lehner with just over six minutes remaining.
Britain had their own chances for an equaliser late on and their coach, Peter Woods, felt they should have come away with at least a point after opening with wins over Slovenia and Kazakhstan.
Woods said: "We certainly played well enough to have drawn the game but overall we had some breakdowns today." The hosts Denmark also have a 100 per-cent record, and head the table along with Germany.Reuse content