Bad carrying on with a criminal (7)
I believe the answer is:
illegal
'a criminal' is the definition.
(I've seen this before)
'bad carrying on' is the wordplay.
'bad' becomes 'ill' (similar in meaning).
'carrying on' becomes 'egal' (I am not sure about this - if you are sure you should give a lot more credence to this answer).
'ill'+'egal'='ILLEGAL'
'with' is the link.
(Other definitions for illegal that I've seen before include "Forbidden" , "Not allowed" , "Criminal, illicit" , "Black-market" , "Prohibited by law" .)