This paper presents the first attempt to examine the stability of a poloidal magnetic field in a rapidly rotating spherical shell of electrically conducting fluid. We find that a steady axisymmetric poloidal magnetic field loses its stability to a non-axisymmetric perturbation when the Elsasser number A based on the maximum strength of the field exceeds a value about 20. Comparing this with observed fields, we find that, for any reasonable estimates of the appropriate parameters in planetary interiors, our theory predicts that all planetary poloidal fields are stable, with the possible exception of Jupiter. The present study therefore provides strong support for the physical relevance of magnetic stability analysis to planetary dynamos. We find that the fluid motions driven by magnetic instabilities are characterized by a nearly two-dimensional columnar structure attempting to satisfy the Proudman-Taylor theorm. This suggests that the most rapidly growing perturbation arranges itself in such a way that the geostrophic condition is satisfied to leading order. A particularly interesting feature is that, for the most unstable mode, contours of the non-axisymmetric azimuthal flow are closely aligned with the basic axisymmetric poloidal magnetic field lines. As a result, the amplitude of the azimuthal component of the instability is smaller than or comparable with that of the poloidal component, in contrast with the instabilities generated by toroidal decay modes (Zhang and Fearn, 1994). It is shown, by examining the same system with and without fluid inertia, that fluid inertia plays a secondary role when the magnetic Taylor numberTm≳ 105. We find that the direction of propagation of hydromagnetic waves driven by the instability is influenced strongly by the size of the inner core.