Held axe out when puffed (7)
I believe the answer is:
exhaled
'puffed' is the definition.
(I've seen this in another clue)
'held axe out' is the wordplay.
'out' indicates an anagram (out can mean wrong or inaccurate).
'held'+'axe'='heldaxe'
'heldaxe' is an anagram of 'EXHALED'.
'when' is the link.
(Other definitions for exhaled that I've seen before include "blown out" , "Breathed out" , "Gave off" , "Sent out" .)