bidder wants to cancel transaction In the last hour of bidding. What do I do as a seller to accept this cancellation

Until the end of the auction there hasn't been a transaction to cancel.

If they end up being the winning bidder and don't pay, after 4 days of non-payment open an Unpaid Item Dispute and close it after a further 4 days of non-payment.

They will get a strike on their account and you will get your selling fees back from eBay and will be able to relist your item if you wish.

The non-payer will not be allowed to leave you any feedback once the dispute has been closed.

Add them to your blocked bidders list.

Dispute information:

http://resolutioncentre.ebay.co.uk/

Blocked bidders list:

http://offer.ebay.co.uk/ws/eBayISAhttp://resolutioncentre.ebay.co.uk/PI.dll?bidderblocklogin&hc=1&hm=v%7F.rp*g454a1e