Awful threat involving English playhouse (7)
I believe the answer is:
theatre
'playhouse' is the definition.
(thesaurus)
'awful threat involving english' is the wordplay.
'awful' indicates anagramming the letters.
'involving' means one lot of letters goes inside another.
'english' becomes 'e' (abbreviation).
'threat' is an anagram of 'thatre'.
'thatre' enclosing 'e' is 'THEATRE'.
(Other definitions for theatre that I've seen before include "Field of operations" , "The rate (anag.)" , "Where audiences may be present" , "Building for dramatic art" , "Scene of action" .)