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I was in Cosades house and an assassin came in and I had to fight him. I accidentally hit Cosades now he's fighting me. How do I stop him from fighting me? If I can't stop him can I continue to advance in the Blades if I can't follow his orders? Thanks for any help.

leave that place and wait 3 to 10 days at other place (by wait function) and he should reset

Three days should be enough to reset him so he's not attacking you any more.

Alternatively, if you're playing on a PC and don't want to wait, you can open the console and type the following:

"caius cosades"->StopCombat
"caius cosades"->SetFight 30

That will stop him from attacking you and allow you to proceed with the main quest.

Since your original problem arose because you slept in Caius's bed, you might want to join a guild (if you haven't already) so you can sleep for free at the guild. Or, if your game was auto-saved when you went to sleep, just restore the auto-saved game from before you went to sleep-- unless you ran outside in a panic and auto-saved over it.

EDIT: My suggestions are more to help prevent future recurrences, not your present predicament, which the other replies already address.

Whenever I'm with a group of NPC companions who rush into a melee, I'm tempted to just hang back and let them all get killed so they won't be in the way anymore, but then I feel too guilty. About the best you can hope for is to get on the opposite side of an enemy and try to coax him/her/it into attacking you while your companion(s) attack from the other side. And forget about telling them to wait here, because as soon as they hear something they're off to join the fray.