Greek character hugged by lithe Tasmanian (5)

I believe the answer is:

theta

I'm a little stuck... Click here to teach me more about this clue!

'greek character' is the definition.
(letter of the Greek alphabet)

'hugged by lithe tasmanian' is the wordplay.
'THETA' is hidden within the letters.
However, I'm uncertain how the hidden word is indicated.

Can you help me to learn more?

(Other definitions for theta that I've seen before include "letter from abroad" , "Make amends for" , "Letter to the Corinthians" , "Character from overseas" , "character from Greece" .)

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