Privy Counsellor ultimately consumed American grub (5)
I believe the answer is:
larva
'grub' is the definition.
(I know that grub can be written as larva)
'privy counsellor ultimately consumed american' is the wordplay.
'privy' becomes 'lav' (synonyms).
'ultimately' suggests the final letters.
'consumed' indicates putting letters inside.
'american' becomes 'a' (common abbreviation - e.g. in organisation names).
The last letter of 'counsellor' is 'r'.
'lav' placed around 'r' is 'larv'.
'larv'+'a'='LARVA'
(Other definitions for larva that I've seen before include "Immature form of (insect) development" , "a developmental stage" , "nit?" , "Manage" , "Wriggler" .)