Stephan Ernst, 45, a far-right militant with previous convictions, was arrested on the basis of DNA evidence for the murder of Kassel politician Walter Lübcke on June 2nd.
Interior Minister Horst Seehofer had said last week that Ernst had confessed to the killing and said he acted alone.
But Ernst's lawyer Frank Hannig told AFP on Tuesday: “Mr Ernst has indeed revoked his confession during the hearing today.”
The suspect remains in custody pending trial.
Hannig said he could not provide further details on the case.
Prosecutors last week confirmed that Ernst had confessed to having “several” weapons, giving details to police on how they were obtained and where he hid them, including in the premises of his employer, a railway manufacturer in Kassel.
Lübcke was an outspoken defender of Merkel's decision to welcome refugees and in 2015 drew the wrath of right-wing extremists by telling Germans who objected that they could leave the country.
His killing has deeply shaken Germany, and raised questions about whether the country has failed to take seriously a rising threat from neo-Nazis.
On Thursday, German Interior Minister Horst Seehofer (CDU) said that the number of known right-wing extremists throughout the country grew by 100 individuals last year to 24,100, compared to the 2017 figures, with 12,700 of them known to be violent.
“That is why I stress that we have a high-risk situation in this area,” Seehofer said.