When did Michael decide to kill Fredo?

I think when Michael talks to Fredo in the boathouse. Fredo says something that seals his fate. "I didn't know it was going to be a hit." Does this statement make Fredo stupider or smarter? What it does do is make Fredo more dangerous. His trip to Havanna reveals that Fredo knew Johnny Ola (and maybe Roth), but it plants the seed of doubt. It doesn't reveal the depth of his involvement.

By saying "I didn't know it was going to be a hit", Fredo sets himself up as one of Mike's "enemies" that he wants to "wipe-out." It also throws all the suspicion of who opened the drapes on Fredo. Fredo admits that Ola approached him to help out because Mike was being "tough on the negotiations". By doing what? The evidence we have of Fredo's "help" is the opening of the drapes. What did Fredo think opening the drapes were for? Observing Michael and Kay's sex/sleeping habits? And if Fredo didn't open the drapes he could have showed someone where the bedroom was. Likely he was duped into doing it, thus his admission of "I didn't know it was going to be a hit".