Mercurial Queen singer seen by disco on occasion (7)
I believe the answer is:
erratic
'mercurial' is the definition.
(I know that mercurial can be written as erratic)
'queen singer seen by disco on occasion' is the wordplay.
'queen' becomes 'ER' (abbreviation for Elizabeth Regina).
'singer' becomes 'rat' (I've seen this in other clues).
'seen by' means one lot of letters go next to another.
'on occasion' indicates alternate letters.
The alternating letters of 'disco' are 'ic'.
'er'+'rat'+'ic'='ERRATIC'
(Other definitions for erratic that I've seen before include "Cartier (anag.)" , "Irregular - eccentric" , "Inconsistent, shifting" , "Changeable" , "Not even" .)