Edward III knew about the plan for Arthur's return, but the plan had not yet progressed far enough for an actual reincarnation to occur, so his hope of a new Round Table was thwarted and he founded the Knights of the Garter instead. But by the end of the War of the Roses the breeding program to create a new Arthur had matured, and Henry VII named his firstborn son Arthur in full knowledge that the boy was the King returned.
Unfortunately, someone then murdered the Prince of Wales, probably through magic though poison is not impossible. I'm not sure who. Likely suspects include the Assassins, the King of France, Savonarola, or Dracula, who was dead about 50 years at this time and may have been a vampire mercenary working for the Vatican.