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In season 1 of Game of Thrones, Lord Baelish sets up Lord Stark when he helps set up the fake coup. After watching season 1 and most of season 2, I still don't understand why Lord Baelish did this. What was his reasoning for setting up Eddard Stark instead of helping him protect the throne?

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Because he's a conniving prick? – cde Apr 3 at 5:04
up vote 37 down vote accepted

Peter Beaelish wants one thing: power. He is the son of a very minor lord with very poor holdings. He grew up seeing the love of his life get married to someone else with a more powerful family name. He knows that he can never actually rule in name, but he wants to be at least the real power behind the throne. For that to happen he needs to setup a puppet king that he can control.

So Lord Beaelish's plan was to back Joffrey's claim to the throne and isolate him from his mother (and the Lannisters) with Lord Stark serving as Joffrey's regent since he is under-aged. In return for this he expected to become Lord Stark's right hand man, giving him a great amount of power especially given Stark's limited political skills.

But Lord Stark had other ideas. He wanted to expose Joffrey's parentage and install Stannis Baratheon and the new king of Westeros. Lord Baelish knew Stannis very well from serving with him in the Small Council. Stannis is a humorless man who had no patience for his scheming and was someone he could not easily manipulate, thus costing him a great amount of power and influence. This was, to him, unacceptable.

So Lord Baelish sided with the Lannisters and helped them foil Stark's plan. Now he has the trust of the Lannisters with all the influence that gives him. The Lannisters are nothing if not generous to those loyal to them, and through further services to the Lannisters he is awarded with the lordship of Harrenhall.

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There are of course other reasons to want Stannis off the throne. Mainly: Stannis is an insane religious extremist who burns people alive. While Joffrey enjoyed killing the innocent as a matter of sport, the bloodthirsty religious inquisition that Stannis could have brought with him would be viewed by many as the greater of two evils. Indubitably, Beaelish acts according to the Objectivist principle (capital O), but it's not hard to see that not-living-under-a-brutal-theocracy would be in most people's self-interest (especially bordello owners), regardless of political ambition. – Marcel Turing Jul 28 '14 at 6:10
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Don'f forget he loved/loves Cat and getting the chance to remove the man that took him from her, when there was no chance he could have done it one on one, he seized on that. Mixing business with pleasure was Littlefinger – Cearon O'Flynn Jan 19 at 10:41

Littlefinger cares about Littlefinger and absolutely nothing else. There is a conversation he has with Ned Stark about their plan. Ned insists on bringing in Robert's brother once Joffrey is dethroned. Littlefinger points out that the new king would probably replace everyone at court but Ned does not care.

This is where Littlefinger tipped the otherway.

If he had supported Ned he would have done himself out of a very nice job with little chance of progression.

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Baelish betrays Stark because Eddard was going to go against his wishes to have Joffery be the successor. While as insane a plan as it seemed, it was Littlefinger's best chance to retain what power he had as Head of Coin.

Should Joffery be proven to be an illegitimate child and not heir to the throne, Littlefinger has a high chance that he'd lose his position and could not allow Eddard, the man of honour, take that away from him.

This resulted in turning the City Guard against Ned, instead of in his favour.

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Good answers so far, I wanted to add another factor that may have contributed to Littlefinger's (Baelish's) betrayal of Ned Stark.
It is revealed later that Littlefinger has been in love with Catelyn since they were kids. So, when Catelyn married Ned Stark, rather than Baelish, this instilled in him a powerful jealousy of Ned Stark. Littlefinger even attempts to persue her romantically after Ned's death! (Talk about awkward!)

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True, but I think it's revealed in the very beginning that he always had a crush on her, even though not directly. – Shadow Wizard Apr 24 '14 at 15:35
    
Not as creepy as his pursuit of Sansa – Cearon O'Flynn Jan 19 at 18:31

Being a master of coins Littlefinger knew financial position of the kingdom. He knew without the money of Lanister's it would be difficult to run kingdom. Had he assisted stark in stopping Joffry from becoming king he would have made himself enemy of Lanister's (apparently stronger than stark both militarily and financially). So that's the main reason which after coupled with other personal reasons made him betray Stark.

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Little finger wanted power. Ned holds the north. It is impossible to take north while Ned is at Winterfell. He killed Jon Arryn with the help of Lysa so that he hoped king Robert would reach out for ned to serve as hand of the king. That way ned is out of Winterfell and also at kings landing where it is easier for him to get rid of Ned with his schemes. He cleverly bought ned's confidence and betrayed him when the time is right. Now he turned Lannisters against boltons and in return he wanted to become the warden of the north. If anyone in the game of thrones is more dangerous it is little finger.

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All these responses are valid, but in Season 5 there is a huge reveal that is another reason Baelish betrayed Ned Stark. Stop reading now if you don't want a spoiler:

After Baelish marries Lysa Arryn and becomes defacto Lord of the Vale (Cercei's thanks) It is revealed that Baelish has been involved with Lysa since the beginning and poisoned her husband (Lord Arryn, Hand of the King) together. Lysa also reveals that Baelish is the one who convinced her to send Catelyn Stark the secret message fingering the Lannisters for his death. Lord Arryn's is the event that sends King Robert Baratheon to Winterfell to ask Ned to be his Hand, thus kicking off all subsequent events in the Game of Thrones.

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No matter how many times I replay this series from the very beginning, there is always something I missed first time round which explains subsequent events. For what its worth, I think jealousy is the primary motive for Baelish betraying Stark - and the l-o-n-g memory of a love lost to a better man. I think the political schemes are all bound up in the jealousy thing.

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