The most common and most likely answer to this crossword clue is the 8 letter word CANBERRA
I've seen this crossword clue in Independent
C
A
N
B
E
R
R
A
More clues leading to the result CANBERRA
- Nick Queen’s supporter going round in this city
- Dress crab and earn capital abroad
- Charlie near bar, rebuilt, in capital city
- City accommodating national building’s elected representatives
- Old liner is able to get carrier by radio
- Is able to book artist after hesitation in capital
- Capital city, location of miracle involving Bible’s original sin
- A
- Bishop to sin in famous wedding location in Aussie city
- Is permitted to do wrong in airline, producing capital
Buddy explains!

The straight part
We know that "Capital city" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case capital city = canberra.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.