Blacken starter of mutton, burn outside (5)
I believe the answer is:
smear
'blacken' is the definition.
(I've seen this in another clue)
'starter of mutton burn outside' is the wordplay.
'starter of' says to take the initial letters.
'burn' becomes 'sear' (sear can mean to burn).
'outside' means one lot of letters goes inside another (some letters go outside others).
The initial letter of 'mutton' is 'm'.
'm' inserted inside 'sear' is 'SMEAR'.
(Other definitions for smear that I've seen before include "Discredit" , "Dirty mark; a libel" , "Greasy/sticky mark" , "Slanderous denigration of character" , "False report" .)