Fabric on pole in island (8)
I believe the answer is:
cretonne
'fabric' is the definition.
(I know that cretonne is a type of fabric)
'on pole in island' is the wordplay.
'pole' becomes 'n' (abbreviation for North, as in North Pole).
'in' indicates putting letters inside.
'island' becomes 'crete' (Greek island).
'on'+'n'='onn'
'onn' placed into 'crete' is 'CRETONNE'.
(Other definitions for cretonne that I've seen before include "Heavy fabric used for furniture covers and curtains" , "heavy material" , "Heavy (floral) cotton fabric" , "Type of cotton fabric" , "Heavy fabric used for slipcovers and draperies" .)