Libel about US city restricting Scottish smoker (7)
I believe the answer is:
calumny
'libel' is the definition.
(thesaurus)
'about us city restricting scottish smoker' is the wordplay.
'about' becomes 'ca' (abbreviation for 'circa').
'us city' becomes 'ny' (I've seen this in other clues).
'restricting' means one lot of letters goes inside another.
'scottish smoker' becomes 'lum' (Scottish word for a chimney).
'ca'+'ny'='cany'
'cany' enclosing 'lum' is 'CALUMNY'.
(Other definitions for calumny that I've seen before include "False accusation or statement" , "A slanderous statement" , "Untrue and malicious statement about a person" , "Slander, defamation" , "Abuse" .)