It holds Peter up as unsuitable (5)
I believe the answer is:
inapt
'unsuitable' is the definition.
(I've seen this before)
'it holds peter up' is the wordplay.
'holds' indicates putting letters inside.
'peter' becomes 'pan' (I've seen this in other clues).
'up' says the letters should be written in reverse (in down clue: letters go upwards).
'pan' reversed gives 'nap'.
'it' enclosing 'nap' is 'INAPT'.
'as' is the link.
(Other definitions for inapt that I've seen before include "Far from fit" , "Not fitting" , "Free from deceit" , "Unsuitable - paint (anag)" , "Not fit, unsuitable" .)