This bug was fixed in the package libvirt - 0.9.8-2ubuntu17.2

---------------
libvirt (0.9.8-2ubuntu17.2) precise-proposed; urgency=low

  * debian/libvirt-bin.install, debian/rules: name the apport file
    source_libvirt.py, not source_libvirt-bin.py.  (LP: #1007405)
  * install /etc/dnsmasq.d/libvirt to configure system wide dnsmasq to not
    listen on the libvirt bridge.  (Following Stéphane's lxc example)
    (LP: #928524) (LP: #231060)
    - postinst: restart dnsmasq; postrm: remove dnsmasq.d/libvirt file and
      restart dnsmasq;  rules, libvirt-bin.dirs and libvirt-bin.install:
      install new debian/libvirt-bin.dnsmasq file.
  * Warn user about bad pc-0.12 machine type, and help user transition.
    (LP: #1001625)
    - qemu-warn-on-pc-0.12.patch: When defining or starting a VM which uses the
      pc-0.12 machine type, warn in libvirtd.log.
    - debian/libvirt-migrate-qemu-machinetype: automatically migrate QEMU VMs
      to newest machine type.  This is not done automatically as there will
      be some users who have good reason to stay with pc-0.12.
 -- Serge Hallyn <[email protected]>   Mon, 11 Jun 2012 21:52:02 -0500

** Changed in: libvirt (Ubuntu Precise)
       Status: Fix Committed => Fix Released

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https://bugs.launchpad.net/bugs/928524

Title:
  lxcbr0 fails to come up when dnsmasq is installed

Status in “dnsmasq” package in Ubuntu:
  Invalid
Status in “libvirt” package in Ubuntu:
  Fix Released
Status in “lxc” package in Ubuntu:
  Fix Released
Status in “network-manager” package in Ubuntu:
  Invalid
Status in “dnsmasq” source package in Precise:
  Invalid
Status in “libvirt” source package in Precise:
  Fix Released
Status in “lxc” source package in Precise:
  Fix Released
Status in “network-manager” source package in Precise:
  Invalid

Bug description:
  ============ SRU justification ===========
  Impact: lxc (by way of lxc-net) fails to start when dnsmasq is installed
  Development fix: install a dnsmasq.d file to prevent the system-wide dnsmasq
  from binding to lxcbr0
  Stable fix: same as Development fix
  Test case:
   sudo apt-get purge lxc
   sudo apt-get -y install dnsmasq
   sudo apt-get -y install lxc
  Regression potential: There should be none, since we are simply telling the
  system-wide dnsmasq (if any) not to bind to the lxcbr0 which our own dnsmasq
  instance will bind to.
  ==========================================

  If dnsmasq is installed and running as default, it will bind all
  interfaces.  As a result lxc can't run dnsmasq against lxcbr0 (and
  same with libvirt and virbr0).

  At the least this should be documented in lxc.  Preferably we'd find a
  way to have dnsmasq be less of a bully.

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