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I recently rewatched The Prestige and find this question to be central to understanding the plot. In the final narration Cutter seems to be challenging the audience to discover a further, hidden secret. This secret would necessarily not be made explicit in the movie, but nevertheless be key to understanding the entire plot.

I think it is possible that Angier did not know that Borden was backstage. Angier had planned all along to stage his death after 100 shows, so that he could return to being the Lord full-time. Perhaps he also realized that he could not go on murdering himself indefinitely, so he put a hard limit on the practice. Borden's presence backstage was therefore a coincidence.

Another possibility is that Angier did know Borden was there spying, because Fallon had told him. After Sarah's suicide, Fallon secretly wanted his twin brother dead. Possibly he involved Cutter in the scheme at some point. Then Fallon killed the Lord in order to retrieve his daughter, whom Angier did not realize was actually Fallon's.

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    Related: movies.stackexchange.com/q/3693/49 For me it seems perfectly clear that he planned those shows not only to do a good show, but also to stage Borden's murder. So I'd say he knew Borden was there from just recognizing him. The last paragraph sounds very unreasonable, though. But interresting question (it's hard to make a bad question about this great movie, anyway ;)) – Napoleon Wilson♦ May 16 '13 at 7:50
  • If the plot is a magic trick, what then are the pledge, turn, and prestige? In the beginning, when Cutter says the pledge could be a man, we see a disguised Borden at Angier's final show. The turn is when Borden says abracadabra and is hanged. The prestige is Fallon returning as Borden. Cutter says "now you're looking for the secret," and we see Fallon among the water tanks. Then he says but "you want to be fooled," and we're shown an Angier duplicate. This sequence might be a clue that Fallon is secretly responsible for his brother's death, not Angier. Fallon is the magician behind the plot. – Sean May 16 '13 at 16:08
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    These are interesting theories, even though I don't remember anything in the movie to support or debunk them. There are some unclear points. First theory assumes that Angier didn't really care about the secret of Borden's show, while Angier seems to be fascinated about it. So the whole line of Angier's plan is dropped from the movie. Second theory assumes that Fallon somehow knew that Angier duplicates himself and there's no evidence behind this. – default locale May 17 '13 at 12:00
  • Angier appears to lose interest in Borden's secret once he has a better secret (Tesla's machine). This is made explicit later when Caldlow (Angier) actually rips up the note containing Borden's secret. Granted, it is odd that initially Caldlow wanted to purchase the secret, only to rip it up later. But I think this may have been a ruse to get Angier's journal into Borden's hands. – Sean May 18 '13 at 2:35
  • Regarding Fallon knowing that Angier duplicates himself, he might have deduced or suspected as much from watching the blind stagehands move the water tanks each night. Also, note that Borden yells at Fallon for not being able to outthink Angier and figure out his secret. Then Fallon (as Borden) tries to get his brother to stop obsessing over the secret and leave Angier alone. But the obsessed Borden doesn't stop. This could be motivation for Fallon to set up his brother, who has basically ruined Fallon's life. I believe Fallon is the calm genius of the operation. Borden is the wild showman. – Sean May 18 '13 at 2:51
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I think Angier was prepared for, and was expecting Borden to crash his show, but he did not know when Borden would do it. Angier clearly did not have the courage and plan to keep killing a duplicate of himself forever. He wanted to outdo Borden mainly for revenge. It was his plan than sooner or later Borden would show up, and get himself incriminated for the accident, and land up in jail, thus, freeing Angier from ever having to do a magic show again. He could retire in peace as the 'greatest showman', revealing his secret to Borden at the jail.

But he was clearly not prepared to meet Borden's twin. And he is visibly surprised to find such a simple answer to Borden's illusion.

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    Purely for predicting Angier becoming the "Greatest Showman", this deserves an upvote. – Adrian Wragg Sep 1 '18 at 16:25
  • That said: I agree that it was Angier's plan, but the 100 limit was not due to lack of courage; more, it set a fixed deadline by which Borden needed to make his move or never uncover the function of Tesla's apparatus. – Adrian Wragg Sep 1 '18 at 21:55
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This is one of those things that could probably never be answered, I am not even sure the author really knows. All the comments above make good points, so not to distract from them, but felt this deserved at least one answer ...

The final narration and the 'clues' that are revealed are meant to be provocative. A set of identical men with different personalities and a man duplicating himself destroying each other (and themselves). So there is the commentary of self-destruction and, ambition and envy/greed destroying the things one values. The only way to end the cycle was for the driving forces to be stopped. The final narration and images/shots are deeply metaphorical.

So, I believe @Sean is correct above; Fallon was the calm one and wanted the destruction to end. With the nod from Cutter at the end we are lead to believe that there was an understanding between them. Cutter can be seen as having the same reservations (conflict) with the actions of Angier and Borden near the end.

So, I don't believe Angier "knew" Borden was backstage, but took advantage of the opportunity (of which he may have desired to happen and planned for) and was not affected by the misery that followed, then paid for his own sins.

The movie gets better each time I watch it. I think it is very undervalued.

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