Dog bites back in state of panic (8)
I believe the answer is:
tailspin
'state of panic' is the definition.
(I've seen this before)
'dog bites back' is the wordplay.
'dog' becomes 'tail' (synonyms).
'bites' becomes 'nips' (nipping is a kind of biting).
'back' says the letters should be written in reverse.
'nips' back-to-front is 'spin'.
'tail'+'spin'='TAILSPIN'
'in' is the link.
(Other definitions for tailspin that I've seen before include "State of rapidly increasing panic" , "Spiral aeroplane dive" , "awful state" , "Chaotic situation" , "confused state" .)