Plants observed going up round dry lake (7)
I believe the answer is:
nettles
'plants' is the definition.
(nettle is a kind of plant)
'observed going up round dry lake' is the wordplay.
'observed' becomes 'seen' ('seen' can be a synonym of 'observed'**).
'going up' says the letters should be written backwards.
'round' means one lot of letters goes inside another.
'dry' becomes 'tt' (abbreviation for teetotal).
'lake' becomes 'l'.
'seen' backwards is 'nees'.
'tt'+'l'='ttl'
'nees' enclosing 'ttl' is 'NETTLES'.
(Other definitions for nettles that I've seen before include "One acting Chief Inspector on TV" , "Plants with stinging hairs" , "Irritates" .)