Refusal to welcome Liberal is recalled in letter (7)
I believe the answer is:
epsilon
'letter' is the definition.
(epsilon is a Greek letter)
'refusal to welcome liberal is recalled' is the wordplay.
'refusal' becomes 'nope' (nope can informally mean no).
'to welcome' is an insertion indicator (in sense of 'inviting in').
'liberal' becomes 'l' (abbreviation).
'recalled' says the letters should be written in reverse (to recall can mean to bring something back).
'l'+'is'='lis'
'nope' going around 'lis' is 'nolispe'.
'nolispe' back-to-front is 'EPSILON'.
'in' acts as a link.
(Other definitions for epsilon that I've seen before include "5th letter of the Greek alphabet" , "Greek character" , "foreign letter" , "Fifth brightest star in a constellation" , "Foreign character" .)