It was the lads' first defeat in normal time in what was this time a 60-minute game (two 30-minute halves) at the tournament having suffered two penalty shoot-out losses after draws in their first two matches.
An early goal from Jean Phillipe Krasso saw the team chasing the game from the fourth minute and both Shayon Harrison and Will Miller were denied by Lorient goalkeeper Gabriel Barriere.
Trailing 1-0 at half-time, further chances came and went before Lorient scored a second with nine minutes remaining through Erwin Koffi.
Ismail Azzaoui - named Player of the Tournament by organisers - grabbed a consolation goal in the final minute but it was too little, too late.
Coach Ugo Ehiogu reflected: "We conceded that early goal, a sloppy goal but we responded superbly and created four really good chances, two saved by the goalkeeper, two we should probably have taken.
"We eventually pulled a goal back late on and that was the least we deserved.
"It was a competitive game, a tough one because we all felt we could have got to the final and we would have loved to have won it, but there were some spirited performances out there."
Spurs U21s (vs Lorient): Voss, Ball, Ogilvie, Veljkovic (Goddard, 45), Maghoma (Walker-Peters, 42), Hall, McEvoy (Sonupe, 48), Amos (Walkes, 53), Sterling, Harrison, Oduwa (Azzaoui, 42).