It's marvellous to celebrate drinking squash (8)
I believe the answer is:
smashing
'it's marvellous' is the definition.
(thesaurus)
'celebrate drinking squash' is the wordplay.
'celebrate' becomes 'sing' (as in to sing someone's praises).
'drinking' means one lot of letters goes inside another (inserted letters are consumed or drunk).
'squash' becomes 'mash' (synonyms).
'sing' placed around 'mash' is 'SMASHING'.
'to' acts as a link.
(Other definitions for smashing that I've seen before include "Committing act of vandalism" , "use for plates at a Greek wedding?" , "2 [COOL] or 3 [DANDY] perhaps, possibly 20d [WICKED] or 22 [GEAR] !" , "Excellent; breaking" , "Producing tennis shot" .)