I n order to fulfill power density requirements in future steady-state fusion reactors the ion density in central parts must be of the order 1020-10z1 m-3. I n such systems high density neutral gas may surround the hot plasma, whether introduced on purpose or not, provided the neutral gas flux from the plasma is not continuously removed by external means. I n gas insulated plasmas large density and pressure gradients will arise close to the boundaries on account of plasma neutral gas interaction effects. I n this paper the stability of gravity driven ballooning modes in the boundary region is investigated. In particular, the coupling between plasma and neutral gas investigated in previous stability analysis is reconsidered. Also effects previously neglected for example the Nernst effect is taken into account.