Fabled woodcutter joins a party with a scholar (3,4)
I believe the answer is:
ali baba
'fabled woodcutter' is the definition.
(I've seen this before)
'a party with a scholar' is the wordplay.
'party' becomes 'lib' (abbreviation for Liberal, uk political party).
'with' means one lot of letters go next to another.
'scholar' becomes 'ba'.
'a'+'lib'+'a'+'ba'='ALI BABA'
'joins' acts as a link.
(Other definitions for ali baba that I've seen before include "He discovered the magic words "Open Sesame"" , "show" , "One associated with forty thieves" , "Arabian Nights hero who discovered 'Open sesame'" , "He outwitted robbers" .)