Firm line held in competition in vessel (7)
I believe the answer is:
coracle
'vessel' is the definition.
(coracle is a kind of vessel)
'firm line held in competition' is the wordplay.
'firm' becomes 'co' (a firm is a company).
'line' becomes 'l'.
'held in' means one lot of letters goes inside another.
'competition' becomes 'race' (race is a kind of competition**).
'l' put inside 'race' is 'racle'.
'co'+'racle'='CORACLE'
'in' is the link.
(Other definitions for coracle that I've seen before include "Small rounded boat" , "Small round boat of skin over a wicker frame" , "Simple Celtic boat" , "Traditional rounded boat with wicker frame" , "Welsh rowing boat" .)