The most common and most likely answer to this crossword clue is the 11 letter word ALTERNATELY
I've seen this crossword clue in The Times
A
L
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R
N
A
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More clues leading to the result ALTERNATELY
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The straight part
We know that "Characters from Rye thus observed" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case characters from rye thus observed = alternately.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does ALTERNATELY mean?
ALTERNATELY adverb- In reciprocal succession; succeeding by turns; in alternate order.
- By alternation; when, in a proportion, the antecedent term is compared with antecedent, and consequent.
- (sometimes proscribed) Alternatively.