Clue: Idyllic spot in Sudan axed following setback (6)
Answer: XANADU
Explanation: Definition: Idyllic spot
 **Hidden in**(in) **reversal of**(… following setback) "Sudan axed".
Defn: An idealised …, as portrayed in Coleridge's poem, Kubla Khan.
Site of Shangdu (from whence, Xanadu), once the capital city of Kublai Khan's empire: