A little red setter almost eating Oscar award (7)
I believe the answer is:
rosette
'award' is the definition.
(type of award or prize)
'a little red setter almost eating oscar' is the wordplay.
'a little' suggests taking the first letters.
'almost' means to remove the last letter (most of the word but not all of it).
'eating' is an insertion indicator.
'oscar' becomes 'O' (phonetic alphabet: alpha, bravo, charlie etc.).
The initial letter of 'red' is 'r'.
'setter' with its last letter taken away is 'sette'.
'r'+'sette'='rsette'
'rsette' enclosing 'o' is 'ROSETTE'.
(Other definitions for rosette that I've seen before include "Equestrian prize" , "Flower-like badge" , "Ribboned award" , "Prize; favour" , "Badge of office or honour" .)