Clue: Upmarket restaurateur, half cut, appearing in paper as 'Peg leg' (10)
Answer: TIMBERTOES
Explanation: Definition: 'Peg leg'
**BERTO **?* appearing in* **TIMES **("paper") 
*The clue seems to indicate that we need to cut the name of a restaurateur in half to get BERTO. My research online throws up one remote possibility – Tonino BERTOLEONI who is a member of a family who claim to be the royal family of an island off the coast of Sardinia. Tonino runs a restaurant on the island and if he is indeed the king of the island, I can't imagine a more upmarket restaurant owner.