Lived with Sid Reed (7)
I believe the answer is:
resided
'lived' is the definition.
(residing is a kind of living)
'with sid reed' is the wordplay.
'with' means one lot of letters goes inside another.
'sid' going within 'reed' is 'RESIDED'.
(Other definitions for resided that I've seen before include "Dwelt" , "Settled" , "Sojourned" , "stayed" , "Abode" .)