Britain's favourite drink is essentially hot water (3)
I believe the answer is:
tea
'britain's favourite drink' is the definition.
(tea is famously associated with Britain)
'essentially hot water' is the wordplay.
'essentially' indicates the central letters.
'hot water' becomes 'steam' (evaporated water).
The middle letters of 'steam' are 'TEA'.
'is' acts as a link.
(Other definitions for tea that I've seen before include "Popular beverage brewed at home" , "This towel is for drying dishes" , "Early evening meal" , "Light afternoon meal" , "Light afternoon repast" .)