Clagett finished two rounds of stroke play at 10-under-par 134 to best the record of 136 set by John Harbottle in 1993. He played Sunday's round at 4-under 68 after tying the tournament record for one round with a 6-under 66 on Saturday.
'Having the record is really cool,' the 59-year-old Clagett said. 'I like that. To think that maybe in the future I can look in the record book and still see my name there would be okay.'
Reigning British Senior Amateur champion Alan Foster finished four strokes behind Clagett at 6-under-par 138 after also shooting a 68 in his second round.
Defending champion Mark Bemowski shot a 68 as well and finished alone in third place at 5-under-par 139. Mike Rice (68) and Martin West (70) shared fourth place, one stroke further back.
Greg Reynolds, the 2002 winner who was in second place overnight, struggled to a 2-over 74 in his second round. He is tied with three other players in 11th place at even-par.
There will be a four-man playoff Monday morning for the final three spots in the match-play portion of the tournament. Frank Saxon, Don Kuehn, Alan Bouchard and Ted Lyford return on Monday to complete the field.