Island virtually beside isle with a capital city (7)
I believe the answer is:
managua
'city' is the definition.
(Managua is an example)
'island virtually beside isle with a capital' is the wordplay.
I cannot really see how this works, but
'island' could be 'man' (Man is an example) and 'man' is present in the answer.
'a' is found in the answer.
This may be the basis of clue (or it may be nonsense).
Can you help me to learn more?
(Other definitions for managua that I've seen before include "Capital of Nicaragua" , "Nicaraguan capital" .)