diff --git a/libvirt-fix-permissions-problem-starting-qemu.patch b/libvirt-fix-permissions-problem-starting-qemu.patch
new file mode 100644
index 0000000..0e01ce1
--- /dev/null
+++ b/libvirt-fix-permissions-problem-starting-qemu.patch
@@ -0,0 +1,71 @@
+From: "Daniel P. Berrange" <berrange@redhat.com>
+Subject: PATCH: Fix permissions problem starting QEMU
+
+There is a minor bug when running QEMU non-root, and having
+capng enabled. libvirt is unable to write the PID file in
+/var/run/libvirt/qemu, since its now owned by 'qemu', but
+libvirtd has dropped all capabilties at this point. The fix
+is to delay dropping capabilities until after the PID file
+has been created. We should also be sure to kill the child
+if writing the PID file fails
+
+* src/util.c: Don't drop capabilities until after the PID file has
+  been written. Kill off child if writing the PID file fails
+
+* src/qemu_driver.c: Remove bogus trailing '/' in state dir
+
+diff --git a/src/qemu_driver.c b/src/qemu_driver.c
+index 9fb8506..26897d3 100644
+--- a/src/qemu_driver.c
++++ b/src/qemu_driver.c
+@@ -468,7 +468,7 @@ qemudStartup(int privileged) {
+             goto out_of_memory;
+ 
+         if (virAsprintf(&qemu_driver->stateDir,
+-                      "%s/run/libvirt/qemu/", LOCAL_STATE_DIR) == -1)
++                      "%s/run/libvirt/qemu", LOCAL_STATE_DIR) == -1)
+             goto out_of_memory;
+     } else {
+         uid_t uid = geteuid();
+diff --git a/src/util.c b/src/util.c
+index ee64b28..39aae24 100644
+--- a/src/util.c
++++ b/src/util.c
+@@ -513,12 +513,6 @@ __virExec(virConnectPtr conn,
+         if ((hook)(data) != 0)
+             _exit(1);
+ 
+-    /* The hook above may need todo something privileged, so
+-     * we delay clearing capabilities until now */
+-    if ((flags & VIR_EXEC_CLEAR_CAPS) &&
+-        virClearCapabilities() < 0)
+-        _exit(1);
+-
+     /* Daemonize as late as possible, so the parent process can detect
+      * the above errors with wait* */
+     if (flags & VIR_EXEC_DAEMON) {
+@@ -543,6 +537,9 @@ __virExec(virConnectPtr conn,
+ 
+         if (pid > 0) {
+             if (pidfile && virFileWritePidPath(pidfile,pid)) {
++                kill(pid, SIGTERM);
++                usleep(500*1000);
++                kill(pid, SIGTERM);
+                 virReportSystemError(conn, errno,
+                                      "%s", _("could not write pidfile"));
+                 _exit(1);
+@@ -551,6 +548,12 @@ __virExec(virConnectPtr conn,
+         }
+     }
+ 
++    /* The steps above may need todo something privileged, so
++     * we delay clearing capabilities until the last minute */
++    if ((flags & VIR_EXEC_CLEAR_CAPS) &&
++        virClearCapabilities() < 0)
++        _exit(1);
++
+     if (envp)
+         execve(argv[0], (char **) argv, (char**)envp);
+     else
+
+
diff --git a/libvirt.spec b/libvirt.spec
index a0cdfae..4a0a00c 100644
--- a/libvirt.spec
+++ b/libvirt.spec
@@ -78,11 +78,14 @@
 Summary: Library providing a simple API virtualization
 Name: libvirt
 Version: 0.7.0
-Release: 0.7.gite195b43%{?dist}%{?extra_release}
+Release: 0.8.gite195b43%{?dist}%{?extra_release}
 License: LGPLv2+
 Group: Development/Libraries
 Source: libvirt-0.7.0-0.6.gite195b43.tar.gz
 
+# Should be in 0.7.0
+Patch01: libvirt-fix-permissions-problem-starting-qemu.patch
+
 # Temporary hack till PulseAudio autostart problems are sorted
 # out when SELinux enforcing (bz 486112)
 Patch200: libvirt-0.6.4-svirt-sound.patch
@@ -252,6 +255,8 @@ of recent versions of Linux (and other OSes).
 %prep
 %setup -q
 
+%patch01 -p1
+
 %patch200 -p0
 
 %build
@@ -612,6 +617,9 @@ fi
 %endif
 
 %changelog
+* Thu Jul 30 2009 Mark McLoughlin <markmc@redhat.com> - 0.7.0-0.8.gite195b43
+- Add patch from upstream to fix qemu pidfile perms problem
+
 * Thu Jul 30 2009 Daniel P. Berrange <berrange@redhat.com> - 0.7.0-0.7.gite195b43
 - Create qemu/kvm user & group to fix upgrades