Spread around permitted range of colours (7)
I believe the answer is:
palette
'range of colours' is the definition.
(I've seen this before)
'spread around permitted' is the wordplay.
'spread' becomes 'pate' (pate is a kind of spread**).
'around' is an insertion indicator.
'permitted' becomes 'let' (I've seen this before).
'pate' going around 'let' is 'PALETTE'.
(Other definitions for palette that I've seen before include "Paint-mixing board" , "Variety of tones" , "painting equipment" , "Artist's colour-mixing board" , "Range of colours - what artist mixes them on" .)