Witch with book in purse (7)
I believe the answer is:
handbag
'purse' is the definition.
('handbag' can be a synonym of 'purse')
'witch with book in' is the wordplay.
'witch' becomes 'hag' ('hag' can be a synonym of 'witch').
'with' becomes 'and' (I've seen this before**).
'book' becomes 'b'.
'in' indicates putting letters inside.
'and'+'b'='andb'
'hag' going around 'andb' is 'HANDBAG'.
(Other definitions for handbag that I've seen before include "Container for small personal items and money" , "Shouldered responsibility" , "Receptacle for money etc." , "Thatcher held this" , "Large purse" .)