Lyric poem Delius initially set in Old English (3)
I believe the answer is:
ode
'lyric poem' is the definition.
(ode is a kind of lyric poem)
'delius initially set in old english' is the wordplay.
'initially' says to take the initial letters.
'set in' is an insertion indicator.
'old english' becomes 'oe'.
The initial letter of 'delius' is 'd'.
'd' going inside 'oe' is 'ODE'.
(Other definitions for ode that I've seen before include "(Railway)system" , "Poem expressing noble feelings" , "Poem in praise of doe" , "poetry" , "- - to a 12 Urn" .)