I now agree (see Mathieu's comment #30) that the most expedient thing to
do is

* update dnsmasq to a new release based on the latest code in Simon's git repo;
* patch the two lines in the n-m code such that (1) nm-dnsmasq listens on 
127.0.0.2 instead of 127.0.0.1 and (2) NM registers 127.0.0.2 instead of 
127.0.0.1 with resolvconf;
* add to n-m a /etc/dnsmasq.d/network-manager file containing  
"bind-interfaces";

and then, longer term

* enhance dnsmasq such that even in bind-interfaces mode it can be made
to listen at all addresses on all interfaces. Dnsmasq would have to
adapt dynamically to changes in network interfaces, opening and closing
sockets in response to the addition and removal of interfaces or
addresses. What would be the best way to implement this, Simon?

Thus in the short term we resolve the issue of standalone dnsmasq not
starting when installed alongside network-manager. Installed alongside
network-manager, dnsmasq will start in bind-interfaces mode and will
forward its queries to nm-dnsmasq.

Alkis needs dnsmasq to start in unbound mode so he will still have to
edit NetworkManager.conf to comment out "dns=dnsmasq" and edit
/etc/dnsmasq.d/network-manager to comment out the  "bind-interfaces".
Longer term, after dnsmasq has been enhanced, this shouldn't be
necessary.

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https://bugs.launchpad.net/bugs/959037

Title:
  NM-controlled dnsmasq prevents other DNS servers from starting

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