Henry I has only fish (7)
I believe the answer is:
halibut
'fish' is the definition.
(halibut is a kind of fish)
'henry i has only' is the wordplay.
'henry' becomes 'hal'.
'has' says to put letters next to each other.
'only' becomes 'but' (I've seen this before).
'hal'+'i'+'but'='HALIBUT'
(Other definitions for halibut that I've seen before include "Swimmer" , "One's scaled" , "Largest flatfish" , "Fish found in Bali hut" , "Fishy sort" .)