Greek character featuring in Goethe tale (5)
I believe the answer is:
theta
'greek character' is the definition.
(letter from the Greek alphabet)
'in goethe tale' is the wordplay.
'in' says the answer is hidden in the clue.
'THETA' is hidden in the letters of 'goethe tale'.
'featuring' acts as a link.
(Other definitions for theta that I've seen before include "Letter from Greece" , "Greek letter equivalent to th" , "letter from abroad" , "classic character?" , "letter to Greeks" .)