Town producing needles, fishing tackle and coloured water (8)
I believe the answer is:
redditch
'town' is the definition.
(I've seen this before)
'coloured water' is the wordplay.
'coloured' becomes 'red' (similar in meaning).
'water' becomes 'ditch' (ditch is a kind of water).
'red'+'ditch'='REDDITCH'
'producing needles fishing tackle and' is the link.
This may not be correct. Some or all of it may belong to another bit of the clue.
Can you help me to learn more?
(Other definitions for redditch that I've seen before include "Worcestershire new town" , "Midlands settlement" , "English town" , "Town S. of Birmingham; CD dither (anag.)" .)