The English Premiership side consider the Bafana Bafana star as vital to their future, and are not deterred by the fact that he has struggled to recapture the kind of form that saw him net 18 goals in his debut season last year.
“Discussions have been on-going for quite a while and we will continue to talk,” confirmed Blackburn chairman John Williams.
The 30-year-old Capetonian still has two years to run on his current contract at Ewood Park, but his club are apparently hoping to conclude negotiations now, before another rich vein of goalscoring form resurrects the interest of potential suitors, which previously was said to include the likes of Chelsea, Manchester United and Rangers.
After failing to find the net during the 2-0 loss to Arsenal last weekend, the former Porto star has now gone 12 games without scoring.
Rangers boss Mark Hughes remains confident that McCarthy will eventually form a first-rate partnership with current golden boy Roque Santa Cruz, however.