Their change of heart is a massive boost to the Tractor Boys' hopes of reaching the Championship play-offs.
McCarthy revealed: "We all said our farewells to Jonny last week after our home draw with Nottingham Forest.
"I even made a presentation to him of an Ipswich shirt with his nickname - Joniesta - on the back."
He added: "We're all chuffed that Jonny is still with us.
"He's a lovely young man, a smashing kid, who plays with a smile on his face. He's a really talented player as well."
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