hostapd and wpa_supplicant prevent each other

[Bob]

Hi list,

I'm trying to use my linux box both as station as well as AP to use it 
as a router for other devices.
Both(virtual)  hostapd and wpa_supplicant are working well individually 
but not together.

When hostapd runs; wpa_supplicant fails to registered with other AP 
providing net connection. If wpa_supplicant starts, hostapd complains as 
below

~~~~~

dd80 match=
nl80211: Add own interface ifindex 16
nl80211: if_indices[16]: 16
phy: phy0
BSS count 1, BSSID mask 00:00:00:00:00:00 (0 bits)
nl80211: Regulatory information - country=00
nl80211: 2402-2472 @ 40 MHz 20 mBm
nl80211: 2457-2482 @ 40 MHz 20 mBm (no IR)
nl80211: 2474-2494 @ 20 MHz 20 mBm (no OFDM) (no IR)
nl80211: 5170-5250 @ 80 MHz 20 mBm (no IR)
nl80211: 5250-5330 @ 80 MHz 20 mBm (DFS) (no IR)
nl80211: 5490-5730 @ 160 MHz 20 mBm (DFS) (no IR)
nl80211: 5735-5835 @ 80 MHz 20 mBm (no IR)
nl80211: 57240-63720 @ 2160 MHz 0 mBm
nl80211: Added 802.11b mode based on 802.11g information
hw vht capab: 0x0, conf vht capab: 0x0
Completing interface initialization
nl80211: send_mlme - da= ff:ff:ff:ff:ff:ff noack=0 freq=0 no_cck=0 
offchanok=0 wait_time=0 fc=0xc0 (WLAN_FC_STYPE_DEAUTH) nlmode=3
nl80211: send_mlme -> send_frame
nl80211: send_frame - Use bss->freq=2412
nl80211: send_frame -> send_frame_cmd
nl80211: Frame command failed: ret=-16 (Device or resource busy) 
(freq=2412 wait=0)

~~~~~~

and nothing at syslog.

hostapd.conf is a simple one for testing purpose

interface=SW_AP
driver=nl80211
ssid=testap
channel=1
hw_mode=g

hostapd v2.3 is running here. Any fix available for this issue ?

regards,
Bob