In the middle of day, arrested by American Government (5)
I believe the answer is:
among
'in the middle of' is the definition.
(I've seen this before)
'day arrested by american government' is the wordplay.
'day' becomes 'mon'.
'arrested by' means one lot of letters goes inside another (I've seen this in other clues).
'american' becomes 'a' (common abbreviation - e.g. in organisation names).
'government' becomes 'g'.
'a'+'g'='ag'
'mon' placed within 'ag' is 'AMONG'.
(Other definitions for among that I've seen before include "In the midst of (others)" , "Go man! (anag.)" , "No mag (anag.)" , "In the middle of, say a crowd" , "in a group" .)