Woodcutter's cat — spotted (7)
I believe the answer is:
whipsaw
'woodcutter's' is the definition.
(a whipsaw cuts wood)
'cat spotted' is the wordplay.
'cat' becomes 'whip' (cat o' nine tails or cat is a type of whip).
'spotted' becomes 'saw' (I've seen this in another clue).
'whip'+'saw'='WHIPSAW'
(Other definitions for whipsaw that I've seen before include "something that cuts both ways" , "means of making cuts" .)