A Nazi propaganda video was used, and a little movie trickery was employed to show the Nazi troops marching and dancing to this very British song. Goebbels, the propaganda minister thought this was highly defamatory to the Nazi's.
Did you watch the video I linked?
In 1942, Charles A. Ridley of the British Ministry of Information made a short propaganda film, "Lambeth Walk - Nazi Style", which edited footage of Hitler and German soldiers from Leni Riefenstahl's classic Triumph of the Will to make it appear as if they were marching and dancing to the song "The Lambeth Walk". A member of the Nazi Party achieved attention in 1939 by declaring "The Lambeth Walk" (which was becoming popular in Berlin) to be "Jewish mischief and animalistic hopping" as part of a speech on how the "revolution of private life" was one of the next big tasks of National Socialism in Germany. The film so enraged Joseph Goebbels that reportedly he ran out of the screening room kicking chairs and screaming profanities. The propaganda film was distributed uncredited to newsreel companies, who would supply their own narration. This version is from the Universal Newsreel company: "The cleverest anti-Nazi propaganda yet! You will howl with glee when you see and hear what our London newsreel friends have cooked up for Hitler and his goose-stepping armies. The 'Nasties' skip and sway in tune to the Lambeth Walk!"
