Atonement from last character leaving Cornish town (7)
I believe the answer is:
penance
'atonement' is the definition.
(I've seen this before)
'last character leaving cornish town' is the wordplay.
'last character' becomes 'Z'.
'leaving' is a deletion indicator.
'cornish town' becomes 'penzance' (I've seen this before).
'penzance' with 'z' taken away is 'PENANCE'.
'from' is the link.
(Other definitions for penance that I've seen before include "Act imposed for sin" , "Remorse" , "Voluntary self-abasement" , "Voluntary self-punishment" , "Self-imposed punishment" .)