City wants ballet, but with much more water! (7)
I believe the answer is:
swansea
'city' is the definition.
(Swansea is an example)
'with much more water' is the wordplay.
'with' says to put letters next to each other.
'much more' becomes 'swan' (I can't explain this - if you can you should give a lot more credence to this answer).
'water' becomes 'sea' (the sea is water).
'swan'+'sea' is 'SWANSEA'.
'wants ballet but' acts as a link.
I am not very happy about this link. Some or all of it may be part of another bit of the clue.
Can you help me to learn more?
(Other definitions for swansea that I've seen before include "Welsh port" , "Ecstasy, a win! (anag)" , "South Wales port" , "Welsh city" , "coastal location" .)