Boston ? While missing out on Jose Contreras, the Boston Red Sox signed reliever Chad Fox on Tuesday and finalized Mike Timlin’s $1.85 million, one-year contract.

New Red Sox general manager Theo Epstein had gone to Nicaragua in an effort to sign Contreras, a right-hander who defected from Cuba in October. Monday was the first day Contreras could negotiate, and he agreed early Tuesday to a $32 million, four-year contract with the New York Yankees.

“Obviously, we are disappointed,” Epstein said after returning to the United States.

“We made every reasonable effort and then some to sign Jose Contreras,” he said. “Jose is a special pitcher, but there is a certain amount of risk involved in signing pitchers who have never thrown an inning of professional baseball. Recognizing that risk, we went to the limit of fiscal sanity with our offer and would not go beyond. We wish Jose well.”

Boston spokesman Kevin Shea said the Red Sox did not offer as much as the Yankees, who have seven starting pitchers under contract and probably will add an eighth by re-signing Roger Clemens.

Boston may now turn to resuming trade talks with Montreal for pitchers Bartolo Colon or Javier Vazquez, who could join Pedro Martinez and Derek Lowe to form a formidable 1-2-3 at the top of the rotation.

“We’ve already returned to the business of putting the finishing touches on the 2003 Red Sox,” Epstein said. “On the way back here now, I’ve talked to several agents and GMs from the Miami airport. We’ve made some progress but nothing is imminent.”

Fox became a free agent Oct. 15 when he refused an outright assignment from Milwaukee to the minor leagues. The 32-year-old right-hander had just six appearances in Milwaukee and Double-A Huntsville last season after going 5-2 with a 1.89 ERA and two saves in 65 relief appearances for Milwaukee in 2001.

Timlin, a 36-year-old right-handed reliever, started last season with St. Louis and was traded to Philadelphia on July 29 for third baseman Scott Rolen. Timlin went a combined 4-6 with a 2.97 ERA in 72 games with no saves.

The Midland, Texas, native had 31 saves with Toronto in 1996 and 27 with Baltimore in 1999. But the last three seasons, with Baltimore, St. Louis and Philadelphia, he was rarely used as a closer.

Timlin, a 12-year veteran, has a career record of 45-51 with a 3.56 ERA and 114 saves in 664 games. He can earn an additional $900,000 in performance bonuses.

Boston and Timlin reached a preliminary agreement last Wednesday.