Be situated in Montpelier (3)
I believe the answer is:
lie
'be situated' is the definition.
(I've seen this in another clue)
'in montpelier' is the wordplay.
'in' says the answer is hidden in the clue.
'LIE' is hidden within 'montpelier'.
(Other definitions for lie that I've seen before include "Fib in alienation" , "Rest; deception" , "Piece of fiction" , "Untruth; rest" , "Couch" .)