Guy embracing paramour, leaving old spa town (7)
I believe the answer is:
malvern
'spa town' is the definition.
(I've seen this before)
'guy embracing paramour leaving old' is the wordplay.
'guy' becomes 'man' (I've seen this before**).
'embracing' indicates putting letters inside.
'paramour' becomes 'lover' (I've seen this before).
'leaving' indicates named letters should be taken away.
'old' becomes 'o' (common abbreviation eg in OE for Old English).
'lover' with 'o' taken away is 'lver'.
'man' placed around 'lver' is 'MALVERN'.
(Other definitions for malvern that I've seen before include "Spa town nr. Worcester" , "rural town" , "Worcestershire town (with hills and a college)" , "Worcestershire spa town" , "English spa town" .)