Flaxen stuff, looking old, covering ends of settee (7)
I believe the answer is:
linseed
'flaxen stuff' is the definition.
'looking old covering ends of settee' is the wordplay.
'looking old' becomes 'lined' (**).
'covering' indicates putting letters inside.
'ends of' suggests removing the centre.
'settee' with its centre taken out is 'se'.
'lined' going around 'se' is 'LINSEED'.
(Other definitions for linseed that I've seen before include "Flax product, a source of oil" , "Enisled (anag.)" , "Type of oil" , "Oil applied to cricket bats" , "Oil produced from flax" .)