I have a wired internet connection that works behind an authenticated proxy server. I followed the steps mentioned here and managed to create a hotspot which my google nexus 7 detects. However, it seems stuck at "obtaining an ip address" and is not able to connect to the internet.

I initially received the following error message when running the script in the terminal:

dnsmasq: failed to create listening socket for 127.0.0.1: Address already in use [fail]

I figured it is because of a conflict with the network manager, I commented out the "dns=dnsmasq" line in the nm configuration file. After a network-manager restart, the first error doesn't show up but I get the following:

Configuration file: /etc/hostapd.conf Failed to create interface mon.wlan0: -23 (Too many open files in system) Try to remove and re-create mon.wlan0

In both cases, however, the hotspot is created and is detected by my android device. only that it cannot "obtain an ip address" and connect to it. Is it because my eth0 connects via a proxy server? Or could there be something wrong with the dnsmasq config? Any help would be appreciated.