Mrs Reagan in French city (5)

I believe the answer is:

nancy

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'french city' is the definition.
(city in France)

'mrs reagan' is the wordplay.
'mrs' becomes 'Nan'.
'reagan' becomes 'cy' (I can't justify this - if you can you should give a lot more credence to this answer).
'nan'+'cy'='NANCY'

'in' acts as a link.

Can you help me to learn more?

(Other definitions for nancy that I've seen before include "Dickensian murder victim - city in northeast France" , "in Oliver?" , "Girl's name; NE French city" , "Girl; French city" , "Bill Sikes's girl (Dickens)" .)

I've seen this clue in The Sun.

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