Sheep finally allowed outside a fold (5)
I believe the answer is:
pleat
'fold' is the definition.
(I know that pleat is a type of fold)
'sheep finally allowed outside a' is the wordplay.
'finally' indicates one should take the final letters.
'allowed' becomes 'let' (to let is to allow or permit).
'outside' is an insertion indicator (some letters go outside others).
The final letter of 'sheep' is 'p'.
'let' going around 'a' is 'leat'.
'p'+'leat'='PLEAT'
(Other definitions for pleat that I've seen before include "Fold in material" , "work on skirt?" , "that's tailor-made" , "Crease" , "Fold sewn or pressed into cloth" .)