Material in river, short rectangular building block (7)
I believe the answer is:
cambric
'material' is the definition.
(cambric is a kind of material)
'river short rectangular building block' is the wordplay.
'river' becomes 'cam' (I've seen this before).
'short' means to remove the last letter.
'rectangular building block' becomes 'brick'.
'brick' with its final letter taken off is 'bric'.
'cam'+'bric'='CAMBRIC'
'in' is the link.
(Other definitions for cambric that I've seen before include "Fine white linen" , "Fine white fabric" , "Material" , "light cloth" , "Thin linen or cotton cloth" .)