That was close relative losing nerve on vacation (4)
I believe the answer is:
phew
'that was close' is the definition.
(both are said after narrowly avoiding danger)
I cannot understand how the remainder of the clue works.
Can you help me to learn more?
(Other definitions for phew that I've seen before include "thank goodness!" , "Recover unharmed" , "What a relief! It's hot!" , "I'm overheating?" , "Gosh, that's a relief!" .)