The spacecraft and ground based observations of comet Halley inner coma showed a localized ion density depletion region whose origin is not well understood. Although it has been linked to a thermal instability associated with negative ions, the photodetachment lifetime of negative ions (~1 sec) is too short compared to the electron attachement time scale (~100 sec) for this processes to have a significant effect. A mechanism for the ion density depletion based on the thermal instability of the cometary plasma due to the excitation of rotational and vibrational levels of water molecules is proposed. The electron energy losses due to these processes peak near 4000 K (0.36 eV) and at temperatures higher than this value a localized cooling leads to further cooling (thermal instability) due to the increased radiation loss. The resulting increase in recombination leads to an ion density depletion and the estimates for this depletion at comet Halley agree with the observations. ¿ American Geophysical Union 1995