Veto such as held by state (8)
I believe the answer is:
negation
'veto' is the definition.
(a veto negates or cancels something)
'as held by state' is the wordplay.
'as' becomes 'eg' (I've seen this in other clues).
'held by' indicates putting letters inside.
'state' becomes 'nation' (synonyms).
'eg' inserted into 'nation' is 'NEGATION'.
'such' acts as a link.
(Other definitions for negation that I've seen before include "Denial of something's existence" , "Making denial" , "Contradiction" , "Refutation by Antigone" , "One giant turns out to be a denial" .)