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When Uncle Fred suggests to his nephew a visit to a suburb, once an estate owned by an uncle when he was younger, Pongo is amazed and relieved, believing the suburbs do not hold anything like the opportunities offered by the city for someone like his Uncle to cut loose and cause havoc.

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Dudeja, thanks, you have just instilled an interest in me for Uncle Fred. I'm gonna start reading him today! – Thursagen Jul 2 '11 at 5:29
Bacon, your most welcome, be here to help me too for things I don't understand, although I have studied english in school time for almost 10 years, but there was no interest in that subject for me, but now I am eager to have perfection in reading,writing and speaking english and this is the sole reason I have started reading this novel. Thanks!! – teenup Jul 2 '11 at 7:07

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To "cut loose" means to let yourself go, act without holding anything back. Havoc is destruction, but here it's meant figuratively. Basically, the phrase just means "go wild" and stretch the bounds of propriety.

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I have understood "cause havoc" - "cross the limits of proper or appropriateness", but still I don't understand "to cut loose". - "Act without holding anything back" - I know each word in this phrase still don't understand its meaning. Can you please elaborate ? Thanks in advance. – teenup Jul 2 '11 at 3:55
To "cut loose" means to act without restraint. Imagine a ship slipping its mooring, or a horse allowed to run free instead of being tethered to a line. – Robusto Jul 2 '11 at 4:00
I got it, but now the meaning in context with the sentence starting from "Pongo is amazed and relieved" is not clear to me. Can you please explain, actually my native language is not English. – teenup Jul 2 '11 at 4:07
The reason Pongo is both amazed and relieved can be understood when you have read the plot of the story.. It also explains why Uncle Fred causes havoc. – Thursagen Jul 2 '11 at 5:13

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