The most common and most likely answer to this crossword clue is the 11 letter word ADULTERATES
I've seen this crossword clue in The Daily Telegraph
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Buddy explains!
The straight part
We know that "Uses water maybe to dilute a trusted ale naughtily" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case uses water maybe to dilute a trusted ale naughtily = adulterates.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 ADULTERATES mean?
ADULTERATES verb- To corrupt.
- To spoil by adding impurities.
- To commit adultery.
- To defile by adultery.