Denies having demented trances (7)
I believe the answer is:
recants
'denies' is the definition.
(to recant is to deny a previous statement)
'demented trances' is the wordplay.
'demented' indicates an anagram.
'trances' with letters rearranged gives 'RECANTS'.
'having' is the link.
(Other definitions for recants that I've seen before include "Withdraws declaration" , "Disclaims, takes back" , "Retracts" , "takes back what was said" .)