The wave measurements at the spacecraft encounters with comet Halley have shown intense wave activity at the lower hybrid frequency. The excitation of the lower hybrid instability by the pickup cometary ions (protons and water group) in the bow wave region and the quasi-linear diffusion of the ions in these fluctuations are discussed. The quasi-linear diffusion of the pickup protons takes place over a scale length shorter than that of the heavier water group ions. This enhances damping of the waves by protons, and when the pickup proton density is large enough, it can result in the saturation of the instability as this damping balances the heavy ion driven growth. The observed electric field amplitude and the scale length of proton relaxation are in agreement with the theory. For small pickup proton density the instability can saturate due to the wave energy cascade arising from the modulation instability of the large-amplitude lower hybrid waves. This saturation mechanism leads to electron acceleration and suprathermal tail formation. ¿ American Geophysical Union 1993