Reject third of yarn twisted on the outside (5)
I believe the answer is:
spurn
'reject' is the definition.
(I know this)
'third of yarn twisted on the outside' is the wordplay.
'third of yarn' becomes 'r' (3rd letter of 'yarn').
'twisted' becomes 'spun' (spinning is a kind of twisting).
'on the outside' indicates putting letters inside.
'r' going inside 'spun' is 'SPURN'.
(Other definitions for spurn that I've seen before include "Show contempt for" , "Reject disdainfully" , "Contemptuously dismiss" , "Repudiate" , "Reject scornfully, rebuff" .)