Lake encircled by a sheltered walkway (5)
I believe the answer is:
allee
'walkway' is the definition.
'lake encircled by a sheltered' is the wordplay.
'lake' becomes 'l'.
'encircled by' indicates putting letters inside.
'sheltered' becomes 'lee' (as in lee side, the side sheltered from wind).
'a'+'lee'='alee'
'l' inserted within 'alee' is 'ALLEE'.
(Other definitions for allee that I've seen before include "Path with trees" , "Parisian walk" , "Pleasant walk" , "part of park" , "garden path?" .)