Monarch in establishment is collapsing (10)

I believe the answer is:

foundering

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'is collapsing' is the definition.
(thesaurus)

'monarch in establishment' is the wordplay.
'monarch' becomes 'ER' (abbreviation for Elizabeth Regina, British Queen).
'in' is an insertion indicator.
'establishment' becomes 'founding' (I can't explain this - if you can you should give a lot more credence to this answer).
'er' put within 'founding' is 'FOUNDERING'.

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I've seen this clue in the Sydney Morning Herald.

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