Rex Features
Reports previously claimed that the 28-year-old, who plays bisexual cross dresser Kris Fisher in the teen soap, was to quit his role towards the end of the year.
However, McCarthy has confirmed that he has recently signed a new contract that ties him to the show until at least 2010.
He said: "I love my character Kris Fisher. He is so 'out there', in your face and ready to shock at every turn. Every day he creates a new drama so who knows what the unconventional Kris will trigger in 2010."
McCarthy has also been cleared by Hollyoaks series producer Lucy Allan to take a short break from filming with the Chester serial in order to appear in The Louis Vuitton Bag, a modern-day film adaptation of Oscar Wilde's Lady Windermere's Fan.
Speaking of his part, he added: "I'm delighted to be on board. The Louis Vuitton Bag is a sexy, modern, contemporary look at an Oscar Wilde classic."
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