Chap protecting eagle circling small island (8)

I believe the answer is:

guernsey

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'island' is the definition.
(I've seen this before)

'chap protecting eagle circling small' is the wordplay.
'chap' becomes 'Guy'.
'protecting' indicates putting letters inside (inserted letters are held or protected).
'eagle' becomes 'ern' (ern is a kind of eagle).
'circling small' becomes 'se' (I can't justify this - if you can you should believe this answer much more).
'ern'+'se'='ernse'
'guy' enclosing 'ernse' is 'GUERNSEY'.

Can you help me to learn more?

(Other definitions for guernsey that I've seen before include "Second largest Channel Island" , "One of the Channel Islands" , "Lower" , "off the Needles?" , "Sir Walter Scott novel" .)

I've seen this clue in The Times.

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