Tool in small bag on bike I removed (7)
I believe the answer is:
spanner
'tool' is the definition.
(spanner is a kind of tool)
'small bag on bike i removed' is the wordplay.
'small' becomes 's' (abbreviation - e.g. clothes size).
'bag on bike' becomes 'pannier' (pannier can mean a bag carried on a bike).
'removed' is a deletion indicator.
'pannier' with 'i' taken out is 'panner'.
's'+'panner'='SPANNER'
'in' acts as a link.
(Other definitions for spanner that I've seen before include "Nut tightener" , "Tool for tightening or loosening" , "In the works, it's disruptive" , "Nut turner" , "Wrench for nuts" .)