Note story with posh setting (6)
I believe the answer is:
milieu
'setting' is the definition.
(I've seen this before)
'note story with posh' is the wordplay.
'note' becomes 'mi' (as in 'do re mi').
'story' becomes 'lie' (story can mean a fabrication).
'with' is a charade indicator (letters next to each other).
'posh' becomes 'u' (abbreviation for upper-class - opposite to non-U).
'mi'+'lie'+'u'='MILIEU'
(Other definitions for milieu that I've seen before include "Environmental condition, surrounding" , "Environment - setting" , "Surroundings - location" , "Social environment or set of surroundings" , "(Social) setting" .)