Bird gazing round lake (8)
I believe the answer is:
starling
'bird' is the definition.
(starling is a kind of bird)
'gazing round lake' is the wordplay.
'gazing' becomes 'staring' ('stare' can be a synonym of 'gaze').
'round' is an insertion indicator.
'lake' becomes 'L' (geographical abbreviation).
'staring' enclosing 'l' is 'STARLING'.
(Other definitions for starling that I've seen before include "Passerine bird" , "Stellar bird with blackish speckled feathers" , "The bird is a good mimic" , "Noisy bird with speckled feathers - somewhat stellar" , "goes around the pier" .)