How to responsibly apply for more than one PhD position? My Master thesis is under review, may be it will finish in a week. I had a discussion with my thesis supervisor about a potential PhD position. He applied for a 1 year grant, with my name as student beneficiary. Together we decided to apply for some more grants once I graduate.  

In the mean time, I got an interview for PhD in another much better university. If I clear the interview, this employer would contact my supervisor for reference and my supervisor might think that I am playing a double game. Did I do something unethical? How to handle this situation? 

I will inform my supervisor about the interview sooner anyway. I am extremely worried about this scenario that I could not focus on preparing for the interview at all.
No reasonable person can fault you for exploring different options since 


there isn't a guarantee of a job 
you haven't committed to this job.


Definitely tell your advisor so that you'll be in the right frame of mind for your other interview and can excel there as well !