Head of state breaking rules quits (7)
I believe the answer is:
resigns
'quits' is the definition.
(resigning is a kind of quitting)
'head of state breaking rules' is the wordplay.
'head of' says to take the initial letters.
'breaking' means one lot of letters goes inside another.
'rules' becomes 'reigns' (reign can mean to rule or govern).
The first letter of 'state' is 's'.
's' inserted into 'reigns' is 'RESIGNS'.
(Other definitions for resigns that I've seen before include "Gives up (a post)" , "Leaves job voluntarily" , "abdicates" , "does the honourable thing" .)