Horrible setting for old material (5)
I believe the answer is:
voile
'material' is the definition.
(I know that voile is a type of material)
'horrible setting for old' is the wordplay.
'horrible' becomes 'vile' (I've seen this in another clue).
'setting for' means one lot of letters goes inside another (inserted letters are set inside others).
'old' becomes 'o' (common abbreviation eg in OE for Old English).
'vile' placed around 'o' is 'VOILE'.
(Other definitions for voile that I've seen before include "Sheer fabric" , "fine material" , "Light semi-transparent fabric" .)