Carving of grand ship English city returned (8)
I believe the answer is:
gargoyle
'carving' is the definition.
(I have seen 'Grotesque carving' mean 'gargoyle' so perhaps 'carving' could also mean 'gargoyle')
'grand ship english city returned' is the wordplay.
'grand' becomes 'g' (G is short for grand as in a thousand).
'ship' becomes 'Argo' (ship in Greek myth).
'english city' becomes 'Ely' (I've seen this in another clue).
'returned' is a reversal indicator.
'ely' backwards is 'yle'.
'g'+'argo'+'yle'='GARGOYLE'
'of' is the link.
(Other definitions for gargoyle that I've seen before include "It drains off water" , "Grotesque architectural statue" , "Grotesque-looking waterspout" , "Grotesque carving" , "Medieval gutter spout made of sculpted grotesque figure" .)