Clue: Happy as a kingfisher? (7)
Answer: HALCYON
Explanation: Definition: Happy
Double definition: in Greek legend, Alcyone and her husband Ceyx were transformed into birds generally identified with kingfishers, and the name halcyon is applied to a genus of kingfishers. According to another legend, kingfishers build a floating nest at sea, and a period of calm around the winter solstice (halcyon days) allowed them to nest successfully; thus HALCYON means 'happy' particularly in the sense of peaceful, fortunate.