In God's favour or damned? (7)
I believe the answer is:
blessed
This clue is a double definition.
'in god's favour' is the first definition.
(blessed by God)
'damned?' is the second definition.
(both are mild expletives)
'or' is the link.
(Other definitions for blessed that I've seen before include "darned" , "Made lucky - made holy" , "worthy of respect" , "Sanctified" , "Bedless (anag.)" .)