Subdued slander about Lawrence (5)
I believe the answer is:
'subdued' is the definition.
'slander about lawrence' is the wordplay.
'slander' becomes 'mud' (mud is a kind of slander).
'about' is an insertion indicator.
'lawrence' becomes 'te'.
'mud' placed around 'te' is 'MUTED'.
(Other definitions for muted that I've seen before include "Soft-pedalled" , "Hushed, dulled or deadened" , "Soft" , "Less than enthusiastic" , "Subdued; not bright" .)