Fabulous Greek girl dined during festival (7)
I believe the answer is:
galatea
'fabulous greek girl' is the definition.
(statue of a girl that came to life in Greek myth)
'dined during festival' is the wordplay.
'dined' becomes 'ate'.
'during' means one lot of letters goes inside another.
'festival' becomes 'gala' (I've seen this before).
'ate' put within 'gala' is 'GALATEA'.
(Other definitions for galatea that I've seen before include "Pygmalion's statue brought to life by Aphrodite" , "Pygmalion's statue that lived" , "Pygmalion's brought-to-life statue" .)