Principal way of working cutting wood (8)
I believe the answer is:
foremost
'principal' is the definition.
(I've seen this before)
'way of working cutting wood' is the wordplay.
'way of working' becomes 'mo' (I've seen this in other clues).
'cutting' means one lot of letters goes inside another (some letters cut their way into a word).
'wood' becomes 'forest' (synonyms).
'mo' placed within 'forest' is 'FOREMOST'.
(Other definitions for foremost that I've seen before include "First in time, place or order" , "Principal" , "First in time, place or importance" , "Pre-eminent" , "premier" .)