When you see that the minimum seperation between arriving and departurting aircraft cannot be met you have to issue a go around. I noticed that controllers tend to forget or simply do not realise that the departing aircraft should abort his take off just as the arrival will abort his landing otherwise you will have a major conflict on the upwind pattern leg.
If you do not cancel the take-off clearance the departing aircraft will climb into the aircraft that is busy going around. Chances are they will be right on top of each other. This must be avoided at all cost.
If you anticpate that the seperation requirements will not be met between an arriving and departing aircraft your first action will be to send the arrival around and then to cancel the departure’s take off clearance. If you see that the departing aircraft has used up enough runway in his aborted take-off roll that he can no longer take-off succesfully instruct him to exit the runway, and then taxi to the runway again.
If the departure can still take-off safely after the cancelled take-off clearance wait until there is appropriate seperation between the aircraft going around before you go ahead and clear him for the second time.