Re, which planned a multi-million dollar cash infusion into troubled US Home Insurance Company, yesterday let its offer expire after the insurer rejected the offer last week.

Home has been hurt by rising liability claims for hazardous waste cleanup costs.

The investors, Cayman-based Trident Partnership LP, mortgage banking company,and Fund American Enterprises Holdings Inc., and San Francisco-based Hellman & Friedman, had entered into an agreement in principle to infuse $420 million into the property/casualty insurer, a wholly-owned subsidiary of Home Holdings Inc.

Investors are "reluctantly letting the offer expire,'' according to Bloomberg business news service, after Home agreed last month to a rival offer and liquidation plan from a group led by Zurich Insurance Co.

The original investors, led by Fund American, had entered into the agreement on December 6, 1994, and sweetened the offer on January 6, 1995.

Home, 65 percent-owned by Trygg Hansa, announced the new agreement with the Zurich led group on December 28, 1994.

"We remain mystified,'' said Mr. Jack Byrne, chairman of Vermont-based Fund American, who under the new agreement was apparently to become chairman of Home Holdings.

"We have not been able to talk with Home or Trygg Hansa about our most recent proposal. Without direct discussions, it is nearly impossible to structure a complicated financial transaction like Home requires,'' he added.

"From the beginning, our intention was to strengthen Home Insurance so it could remain healthy and independent. Trygg Hansa said they would contribute to that outcome. Now they are apparently not willing to do so,'' he added.

"While we are still committed to our original vision -- preserving a 150-year-old part of the American insurance scene -- we have been stymied in our efforts to achieve that. We remain interested in Home Insurance and its franchise and will continue to follow the developments to their conclusion,'' Mr. Byrne continued.

"The chance that Fund American's group will make a third offer is pretty slim,'' said Mr. Terry Baxter, a spokesperson for Fund American.

The revised Fund American $10.50 a share bid topped Zurich's plan to pay $242 million for Home shares.