The MHD stability of the cometary inner sheath determined by the balance between the inward Lorentz body force and the outward ion-neutral drag force is investigated by numerically solving the wave equations which include resistivity, plasma motion, and plasma pressure with the help of two-point boundary value method. The eigenvalues and the eigenfunctions are obtained numerically by treating the cometary inner sheath as a layer of finite thickness, bounded by the contact surface, that is, the diamagnetic cavity boundary. To gain an insight into the problem, certain limiting cases of the wave equations are also discussed. The diamagnetic cavity boundary and the adjacent layer of about 100-km thickness of comet Halley is found to be unstable. The effects of finite plasma pressure, dissociative recombination, mass loading due to photoionization, resistivity, and plasma motion are found to be stabilizing but are unable to quench the instability completely. An estimate of &tgr;c/&tgr;i shows that it lies in the range of 10 to 20 or even higher which appears to be sufficient for the effective penetration of the magnetic field perturbations into the cavity surface. Motion of the Halley ionopause has been confirmed by observations: according to Neubauer (1987), Halley ionopause seemed to have strong ripples with a wavelength of several hundred kilometers. ¿ American Geophysical Union 1993