Use up a shade found in middle of paeony (3,4)
I believe the answer is:
eat into
'use up' is the definition.
(synonyms)
'a shade found in middle of paeony' is the wordplay.
'shade' becomes 'tint' (synonyms).
'found in' means one lot of letters goes inside another.
'middle of' says to take the centre.
The central letters of 'paeony' are 'eo'.
'a'+'tint'='atint'
'atint' placed into 'eo' is 'EAT INTO'.
(Other definitions for eat into that I've seen before include "start wearing out" , "Etch" , "Consume (resources)" , "run down" , "Corrode (something)" .)