Engineers gave up and retreated (7)
I believe the answer is:
receded
'retreated' is the definition.
('recede' can be a synonym of 'retreat')
'engineers gave up' is the wordplay.
'engineers' becomes 're' (Royal Engineers).
'gave up' becomes 'ceded' ('cede' can be a synonym of 'give up').
're'+'ceded'='RECEDED'
'and' is the link.
(Other definitions for receded that I've seen before include "Fell back" , "Pulled back" , "Moved backwards" , "withdrew" , "Ebbed" .)