Material used by funny Londoner (5)
I believe the answer is:
nylon
'material' is the definition.
(nylon is a kind of material)
'used by funny londoner' is the wordplay.
'used by' says the answer is hidden in the clue.
'NYLON' is hidden within 'funny londoner'.
(Other definitions for nylon that I've seen before include "Synthetic material used in textiles" , "Unaccompanied part song" , "where ladder can appear?" , "may be damaged by running" , "Cover for leg" .)