Dress circle next to stage — no way! (7)
I believe the answer is:
bandage
'dress' is the definition.
(I know that bandage is a more specific form of dress)
'circle next to stage? no way' is the wordplay.
I cannot quite see how this works, but
'circle' could be 'band' (synonyms) and 'band' is present in the answer.
'way' could be 'e' (Compass direction - East) and 'e' is present in the answer.
This explanation may well be incorrect...
Can you help me to learn more?
(Other definitions for bandage that I've seen before include "Injury protection" , "Wrapping for wound" , "Bind (a wound)" , "Wound dressing" , "Dressing for wounds" .)