Liberation let out free capital (7)
I believe the answer is:
nairobi
'capital' is the definition.
(Nairobi is an example)
'liberation let out free' is the wordplay.
'out' is a deletion indicator.
'free' is an anagram indicator.
'liberation' with 'let' removed is 'ibraion'.
'ibraion' is an anagram of 'NAIROBI'.
(Other definitions for nairobi that I've seen before include "Flat round object" , "I, a robin (anag) - city" , "Kenya's capital city" , "African city" , "Kenyan city" .)