Given up working in smithy (7)

I believe the answer is:

forgone

'given up' is the definition.
('forgo' can be a synonym of 'give up')

'working in smithy' is the wordplay.
'working' becomes 'on'.
'in' means one lot of letters goes inside another.
'smithy' becomes 'forge' ('forge' can be a synonym of 'smithy').
'on' going within 'forge' is 'FORGONE'.

(Another definition for forgone that I've seen is " Done without".)

I've seen this clue in The Telegraph.

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