"Everything that's happened since makes me know that there was deliberate blockage and there were also all sorts of secret, private meetings," she told the hearing in London.
Nadim Baba, Al Jazeera's correspondent in London, said Short painted a damning picture of Blair's style of government.
"She describes an atmosphere at 10 Downing Street which was very secretive," he said.
Short, who quit her post of international development secretary in May 2003 over the handling of the conflict, said normal parliamentary communications were "closed down" in the lead up to war.
"There was never a meeting that said 'what's the problem, what are we trying to achieve, what are our military, diplomatic options?'
"We never had that coherent discussion ... never."
Short said Goldsmith had not told the cabinet about his deliberations over the legality of war, or that senior foreign office lawyers believed the invasion would be illegal without a second UN resolution.
Last week the former attorney general told the inquiry that he had initially believed going to war would not be legal without an explicit UN mandate, but changed his mind after consulting lawyers abroad.
But Short said she believed Goldsmith had been pressured by Blair, something he denies. Clare, however, admitted she had no direct evidence to back this up.
Her testimony came days after Blair appeared before the inquiry, in what was seen as the climax of the proceedings so far.
'Wing and a prayer'
Blair told the five-member panel that there had been "substantive discussion" with senior ministers in the cabinet.
He also made a robust defence of his decision to go to war, saying Saddam Hussein, Iraq's then ruler, had posed a threat to the world and had to be disarmed or removed.
But Short said she had seen the intelligence and there was no imminent threat from Saddam.
"I knew that the intelligence agencies thought that Saddam Hussein didn't have nuclear [weapons] ... [he] would if he could but he was nowhere near it. It wasn't saying there was some new imminent threat," she said.
Short was also damning of the planning that had been made for the aftermath of the invasion.
"There was no reason why it had to be as quick as it was," she said.
"It was all done on a wing and a prayer.
"We could have gone more slowly and carefully and not had a totally destabilised and angry Iraq into which came al-Qaeda, which wasn't there before and that would have been safer for the world."
Our correspondent said Short also criticised the military for failing in their duty to meet their obligations under the Geneva convention as an occupying force in Iraq.
The former international development secretary quit the Labour Party parliamentary group in 2006 to become an independent, saying Blair had engaged in deceit over
the Iraq War.
The Iraq inquiry, though not a trial, was set up last year by Gordon Brown, who took over from Blair as the UK prime minister, to identify mistakes made.
The five-person panel is headed by John Chilcot, a former senior civil servant, and has been accused several times of being too soft on witnesses.