About half way through The Prestige the court magistrate meets with John Cutter in Angier's warehouse. Cutter tells the magistrate that he can't let Lord Cawdlow take Robert's machine, that it is too dangerous. He says that it wasn't built by a magician but by a wizard and that there was no trick behind it.
During the show Robert Angier went to great lengths to conceal the method from Cutter and indeed later when they meet he seems shocked that Angier is still alive.
So how did Cutter know that the machine was dangerous?